Africa's Debt Crisis & Belt and Road "Tofu-Dreg" Projects/China VS U.S.: Open Tug-of-War in Africa

in 2014 the U.S held the first U.S Africa Summit with African leaders in Washington DC under President Barack Obama eight years later on December 13 2022 incumbent President Joe Biden hosted the second three-day U.S Africa Summit to which 50 African leaders were invited this was followed by a 10-day trip to Africa by U.S treasury secretary Janet Yellen on January 17 2023 this series of heavyweight diplomatic moves signals A Renewed U.S relationship with Africa with the greatest force behind it being to counteract the Chinese Communist party or ccp's penetration of the African continent prior to yellen's trip to Africa on January 16 2023 China's new foreign minister Qin gong concluded a visit to five African countries these five countries are Ethiopia Gabon Benin Angola Egypt and the headquarters of the African Union and the Arab League China's official media xinhua reported that this was the 33rd consecutive year the China's foreign minister had chosen Africa as the first stop on the New Year's visit reaffirming the Deep traditional friendship between China and Africa Ethiopia known as The Horn of Africa and the anchor of the region is the second most populous country on the continent in the hub of the ccp's belt and road projects in Africa Egypt the third largest economy in Africa and home to the headquarters of the Arab League is one of the most frequently visited countries by China's foreign ministers over the years according to the China Africa cooperation Forum in Egypt the Belton Road initiative is in deep alignment with Egypt's Vision 20 30. we are ready to conduct cooperation in major projects with Egypt import more quality products from Egypt and encourage more Chinese investments in Egypt we discussed the china-arab state Summit that took place in Riyadh Saudi Arabia we as the Arab League announce that we will go ahead and Implement all the agreed recommendations projects forums and activities in all fields China is ready to work with the Arab League to execute the initiatives by the china-arab state Summit and work hand in hand to build a Chinese Arab Community for a common bright future together among these five countries Angola Gabon and Benin have relatively weak relations with the CCP but have close deep ties with the U.S and other countries in Europe all three countries are in urgent need of foreign aid Angola located in Southwest Africa is the most important trade partner and oil supplier of the U.S in Africa as well as the largest Aid partner of the EU to Africa Gabon in central Africa is one of the top U.S partner countries in Africa and the two countries have held many joint military exercises Benin located in Western Africa has long received a lot of aid from Western countries and attaches great importance to maintaining relations with France the U.S and other Western powers during his visit to Africa Chinese foreign minister qingang said in a high note that China has signed debt relief agreements or reached a consensus on debt relief with 19 African countries the largest amount of debt relief among the G20 members China is committed to helping Africa reduce the debt burden and actually participates in the G20 debt service suspension initiative we have signed with most African countries suspension and relief we are working with countries to deal with individual cases concerning Ethiopia chart and Zambia China has announced exemption the intergovernmental interest-free loans that expired at 2021 for African countries and will not transfer 10 billion dollars worth of sdrs in the IMF to developing countries his remarks sparked a public outcry in China which condemned the CCP for throwing money around Africa when it couldn't even afford Pfizer's antiviral medicines they are an urgent need as the virus tsunami sweeps through China Qing gong stressed that China doesn't see the African continent as a Battleground between the west and Beijing in reality Africa is significant to the CCP as an invaluable diplomatic tool to break out of its International isolation in 1956 Egypt was the first African country to have established diplomatic relations with the red regime of the CCP during the cultural revolution when the economy came to a standstill the CCP still used its national resources to provide economic aid to Africa in 1971 this red regime replaced the Republic of China in the U.N and African countries cast a crucial vote of support one-third of the vote in the process consequently many African countries still gravitate to the CCP on major issues without principle from 1999 to 2002 the CCP manipulated such third world allies to have successfully blocked U.S motions on the deteriorating human rights situation in China at the UN Commission on human rights and these countries later use their votes to kick the U.S out of the U.N Commission on human rights so that the U.S could no longer have a voice by the time Xi Jinping came to power the CCP was increasingly isolated in the International Community the current Beijing government increased penetration and control of Africa can strengthen its hand against Europe and the U.S from the 1990s and especially into the 21st century Beijing has significantly increased its economic interests in Africa in addition to maintaining its original political interests such as votes in international organizations the African continent also possesses the cheap labor natural resources and strategic military locations that Beijing needs to achieve its Ambitions of becoming a great world power Western countries such as the U.S can't compete on a Level Playing Field regarding environmental human rights and labor conditions with the Chinese Communist party after Xi Jinping became president he launched a belt and Road economic strategy in 2013 to export China's excess capacity primarily in infrastructure projects such as hydropower airports ports and railways by the end of 2021 out of 53 African countries which China has diplomatic relations 52 countries as well as the Au commission have sent cooperation documents with China for the joint construction of one belt one road according to a study published by the U.S Think Tank Carnegie Endowment for International Peace in mid-may 2022 China's economic footprint in Africa has now far surpassed that of the U.S China's trade with the African continent exceeded 250 billion US dollars in 2021 making it the largest trading partner of many African countries in comparison the U.S trade with Africa was only 64.3 billion US dollars that is to say the ccp's economic dominance in Africa is currently evident in comparison however critics argue that the economic benefits haven't benefited the local people but have instead been lost to the corruption of small groups the CCP has not only invested in Africa to export corruption but also has trouble guaranteeing the quality of its projects in January the Wall Street Journal reported that many of the ccp's belt and road infrastructure projects had serious flaws in their construction including a giant hydroelectric power plant in Ecuador which cost 2.7 billion US Dollars Ecuador's national electricity company says officials have found more than 17 000 cracks and the plan's eight turbines since it began operations in 2016. the officials believed that these cracks are from faulty steel imported from China in 2021 the company sued Sino Hydro Corporation in an international arbitration Court in Chile the case is now being heard this has Rey's fears that the largest power plant in Ecuador May collapse this hydroelectric power plant is believed to have plunged Ecuador into a deeper debt crisis previously China Development Bank agreed to finance 85 percent of the initial cost of the hydropower plant with an interest rate of 6.9 percent Sino Hydro was responsible for the construction and hundreds of Chinese workers were flown in to build a plant between 2010 and 2016. the former energy minister of Ecuador and former Secretary General of the organization of petroleum exporting countries said the problems we have today are due to the poor quality of equipment and parts in the projects built by China according to a 2021 document from the Johns Hopkins University China Africa studies initiative in Africa more than 60 percent of the revenue received by Major International contractors in 2019 went to Chinese companies Chinese construction companies are often awarded these government projects or they approach local officials directly promising them easy access to financing from Chinese Banks but now low quality construction threatens to their infrastructure and leave African countries with more costs in the coming years to remedy the problem also in Pakistan for example officials shut down the Neelam jalam hydropower plant last year after detecting cracks in a water transmission tunnel Pakistani officials said in November 2022 that they feared the tunnel would collapse after four years of use at the plant the plant's closure has added about 44 million U.S dollars to Pakistan's monthly power costs since July according to Regulators uganda's power producer meanwhile said it has identified more than 500 construction defects in a chinese-built 183 megawatt hydropower plant on the Nile this power station has been failing frequently since it went into operation in 2019 the power plant cost 567.7 million US dollars to build mainly through a 480 million US dollar loan from the export import Bank of China another chinese-built hydropower plant on the lower Nile was completed three years behind schedule Ugandan officials have attributed the delays to various construction defects including cracked Walls Chinese contractors also installed faulty cables switches and fire suppression systems that must be replaced earlier this year the government has already had to repay a 1.44 billion US dollar loan from the export import Bank of China but the plant isn't yet operational these types of examples are commonplace many Chinese projects have been detrimental to the African ecosystem as well moreover the outside world has noted the ccp's infiltration of African media Freedom House and international human rights organization based in Washington DC published the report beijing's Global media influence in 2022 the report points out that the Chinese government has been actively expanding its influence over various media outlets around the globe since 2019 shifting foreign opinion in favor of China and suppressing and bullying media and voices critical of the Chinese government the Chinese government invites African journalists to train in China so that they can write favorable articles about China when they return home for example when the U.S House speaker Pelosi visited Taiwan the tensions in the International Community were so high that the international media covered the event heavily African media however didn't talk much about this matter because African countries such as South Africa Algeria and Kenya only report news favorable to China China helped establish a 10 000 satellite TV reception project in Africa in 2022 which has enabled rural Africa to receive China biased news content the U.S China tussle kicking off in January 2023 has focused on the debt problems of African countries the CCP has provided loans to many low-income African countries thus becoming a significant creditor in Africa however the specific terms of the loans provided and the collateral required from African countries have not been transparent to the public the reality is China is the largest creditor of developing countries many of which have fallen into debt crises according to the World Bank the world's poorest countries face 35 billion US dollars in debt payments to creditors in both the official and private sectors in 2022 of which more than 40 percent is owed to China debt is a constraint on China's economic development but the CCP has also used the debt crisis to exert a great deal of influence over debtor countries including Africa since the last Administration the U.S has repeatedly denounced Chinese loans to African countries as a debt trap yellin has also repeatedly criticized Beijing the world's largest creditor for not moving more quickly to restructure the debts of poor African countries in a January 14th interview with NPR Yellen set her visit to Africa aimed at deepening economic ties with Africa she acknowledged the ccp's penetration in providing loans to African countries and trade with Africa however African leaders made clear that December 2022 U.S Africa Summit that they were seeking greater U.S involvement in 2020 Zambia defaulted on its debt failing to make a 42.5 million US dollar Bond payment becoming the first African country to default during the covid-19 epidemic the country now owes a total of 17 billion US dollars in foreign debt and China is its largest creditor Zambia has been trying to reach an agreement with the CCP to restructure its debt and its negotiations on how to deal with the dead loads have been ongoing but little progress has been made so far a situation that has left local people in poverty and unemployment Zambia is an inland country larger than the state of Texas rich in Copper and the majority of its population lives on less than two US dollars a day other debt-ridden countries in Africa are closely watching Zambia's debt restructuring progress according to Reuters economic analysts say some African countries including Zambia are unhappy with the loans provided by the CCP and are looking for alternatives addressing Zambia's debt problems is a major reason for yellen's trip to Africa where she met with the Zambian president and Finance Minister on January 24th to discuss the ongoing negotiations at a press conference Yellen called out to China for an immediate solution to Zambia's heavy debt burden as the issue is critical she said that although she had a constructive conversation with Chinese Vice Premier Leo Hua in Switzerland the week before about Zambia's debt it is taken too long to resolve the issue this critically important Museum here to be able to people's Assurance debt and it's critically important to allows Anthony to finance and make the Investments you will be necessary and required to promote economic growth and sustainable development I am encouraged that progress may become possible shortly let me say I know that the Chinese have been a barrier to concluding the negotiations I recently met with my Chinese counterpart just a few days ago in Zurich and I specifically raised the issue of Zambia and ask for their cooperation in trying to reach a speedy resolution where in the dirty situation before which was a result about 15 years ago through a multilateral actions unfortunately through our own dates we brought back the issue of the dead and sustainability but that's the reality and we as a government we do not shy away from admitting that there was a problem skeptical Zambian president said in a bilateral meeting with Yellen that the country faces a deadline to repay its debt in late March it will further drag on the economy and a solution must be found soon Yellen was speaking in Lusaka Zambia's capital city which is dominated by Chinese financing facilities expanded with Chinese funds in 2015 are visible at the local International Airport billboards with Chinese logos and newly built companies can be seen throughout the city attesting to beijing's Growing influence and competition with the U.S earlier on January 20th Yellen spoke about Africa's vast potential and prospects for the continent during a speech in Dakar the capital of Senegal a West African country she said there is still much work to be done to address the many challenges facing Africa and the globe but that Africa will determine the future of the global economy she pointed out that Africa population boom can create tremendous economic opportunities it has the talent and resources to develop Global Industries and drive Global innovation in other words Africa's success will mean success for all of us she said it was this potential of Africa that prompted the Biden Administration to develop a new strategy for sub-Saharan Africa our engagement is not transactional it's not for show and it's not for the short term the United States is here as a partner to help Africa realize its massive economic potential Yellen also said in the car that President Biden vice president Harris and several cabinet secretaries will visit Africa this year Africa will shape the future of the global economy and I explained that the United States is ready to work with Africa as an equal partner we know that a thriving Africa is in the interest of the United States a thriving Africa means a larger market for our goods and services it means more investment opportunities for our businesses I believe that Missy Ellen and I will have preferred discussion today on a number of issues including Andy money London and calendar are in finance financing of terrorism climate financing sovereign debt resolution in Africa another Global issues which are going to part of the G20 next month the U.S Africa leader Summit last December the U.S pledged to provide at least 55 billion dollars in Aid to Africa over the next three years it also signed a memorandum of understanding with the Secretariat of the African Continental free trade area to expand trade between the two entities some analysts argued that the tug of war between major Powers is a fact of life on a global scale but it is no more acute in Africa than in other parts of the world we find that this perception lacks a basic understanding of the character of the CCP last August in the document U.S strategy towards sub-Saharan Africa it said the People's Republic of China PRC by contrast sees the region as an important Arena to challenge the rules-based international order Advance its own narrow commercial and geopolitical interests undermine transparency and openness and weaken U.S relations with African peoples and governments the U.S the EU and the G7 countries have all launched major investment programs in developing Africa to compete with the ccp's belt and Road Project offering African countries another option against these backdrops Africa has become a focal point of global strategic competition between China and the US this means to some extent that African countries are facing a choice on whether to continue to support the red CCP some of them have already joined the global trend of blocking it thank you [Music] foreign [Music]