China-Africa Economic Engagement Since 2000

 The China Global South Project published on 26 August 2024 an analysis titled "Learning Through Lending: China-Africa Economic Engagement through FOCACs Past and Present" by Lucas Engel.  

The analysis underscores China's move away from financing of large infrastructure projects in Africa, a new focus on lending to small-and medium-sized enterprises and growing African trade deficits with China.  It suggests these changes have constituted a renegotiation of the basic tenets of China-Africa economic engagement.  The analysis concludes that efforts to correct past imbalances and embrace and preserve past successes will be necessary to realize the full potential of next month's Forum on China-Africa Cooperation. 

China's Resource-backed Loans to Africa Reassessed

 The South China Morning Post published on 4 May 2024 an article titled "Does China's Oil-for-Infrastructure Lending Model in Africa Need a Rethink?" by Jevans Nyabiage.

Chinese loans to certain African governments back by payment in resources such as oil, known as the Angola model, come with a hidden danger--fluctuating commodity prices.  The African Development Bank has called for an end to the loans.  

China's Role in African Debt

 South Africa's Institute for Security Studies published on 1 November 2023 a policy brief titled "Africa's Debt Dilemma: China's Role and Implications for Development" by Jana De Kluiver.  

China is not the primary cause of African debt distress, but does raise concerns due to lack of transparency, clauses impacting local industries, and the absence of collective restructuring options in Chinese loan contracts.  

China: Moving from Belt and Road to Global Development Initiative

 The Diplomat published on 11 July 2023 an analysis titled "China's Transition from the Belt and Road to the Global Development Initiative" by Lunting Wu, research associate at the Berlin-based Cluster of Excellence "Contestations of the Liberal Script."

The author argues that China's Belt and Road Initiative (BRI) is being eclipsed and may eventually be replaced by the newer Global Development Initiative (GDI).  The author explains the differences between the BRI and GDI and why China has decided to emphasize the latter.  

China-Africa Trade Soars in 2022

Nikkei Asia published on 27 January 2023 an article titled "China-Africa Trade Soars on Spike in Commodity Prices" by Robert Bociaga. 

Rising commodity prices and Beijing's effort to promote imports from Africa pushed trade up 11 percent to $282 billion in 2022.  China's exports to Africa were $164 billion while imports reached $118 billion.  Nigeria was Africa's largest importer from China, while South Africa was the biggest exporter.

Negative Impacts on Africa of Putin's War in Ukraine

 News24 posted on 14 April 2022 an article titled "Russia-Ukraine War Will Hit Africa Hard and Could Even Lead to Conflict - World Bank" by Khulekani Magubane.

The war in Ukraine will likely increase pressure on food staples, oil, gas and other essentials in Africa says the World Bank.  The biggest concern is that this increased pressure could lead to local conflict in Africa.  

China-Africa Trade Falls

The South China Morning Post published on 17 July 2020 an article titled "China-Africa Trade Takes Big Hit from Coronavirus in First Half" by Jevans Nyabiage.

China-Africa trade fell by 19 percent by dollar value in the first half of 2020 as COVID-19 led to reduced demand for and lower prices of African commodities.  China reduced its imports from Africa by 31 percent while exports to Africa fell by 8 percent. 

Africa to China: Will You Forgive Debt?

The South China Morning Post published on 5 May 2020 an article titled "Africa Has a Question for Beijing: Will You Forgive Us Our Debt?" by Jevans Nyabiage.

African states expect a devastating impact on their economies this year from the COVID-19 pandemic and are appealing for relief from repayments on billions of dollars in outstanding debt. Most of the appeals involve China, the biggest bilateral lender to the continent, but it is unclear how Beijing will respond.

Has China's Bet on Africa Failed?

Nikkei Asian Review published on 1 May 2020 a commentary titled "China's Expensive Bet on Africa Has Failed" by Minxin Pei, Claremont McKenna College.

The author concludes that because of pressure to cancel debt and investments that will fail, China must realize that it is unlikely to recover most of its sunken investments or loans because of the economic impact of coronavirus on Africa.

Comment: While the coronavirus is challenging economies globally, Minxin Pei's analysis strikes me as excessively negative.

Most Vulnerable African Countries to Impact of Coronavirus

Overseas Development Institute published in February 2020 a report titled "Economic Vulnerabilities to Health Pandemics: Which Countries Are Most Vulnerable to the Impact of Coronavirus" by Sherillyn Raga and Dirk Willem te Velde.

This is an extensive global study on the economic impact of China's coronavirus. The most exposed African countries include Angola, DRC, Sierra Leone, Lesotho, and Zambia.

Impact of US-China Trade War on Africa

The United Arab Emirates' The National published on 17 April 2019 an article titled "How Africa Became Collateral Damage in US-China Trade War" by Gavin du Venage.

The author argues that those African countries such as Angola, South Sudan, and Zimbabwe that export most of their oil and minerals to China are being hurt by the US-China trade war. As the Trump administration tries to close the trade gap with China by putting tariffs on Chinese exports to the United States, it reduces China's need to purchase African raw materials. If this situation continues, the African Development Bank warns that the trade tensions could cause a 2.5 per cent reduction in the GDP of resource-intensive African countries and a 1.9 per cent reduction for oil exporters by 2021.

Impact of US-China Trade War on Africa

The Center for Strategic and International Studies published in April a study titled "Innocent Bystanders: Why the U.S.-China Trade War Hurts African Economies" by Judd Devermont and Catherine Chiang.

African Development Bank experts warn that trade tensions between the United States and China could cause a 2.5 percent reduction in GDP in resource-intensive African countries and a 1.9 percent reduction for oil exporters by 2021.

African Economic Outlook 2019

The African Development Bank has just released its African Economic Outlook 2019 in English, French and Portuguese.

After tepid real GDP growth of only 2.1 percent in 2016, Africa's economy recovered with 3.6 percent growth in 2017 and 3.5 percent growth in 2018. Growth is expected to accelerate to 4 percent in 2019 and 4.1 percent in 2020. In 2019, 40 percent of African economies are projected to see growth of at least 5 percent.

Five trade policy actions could potentially bring Africa's total gains in 2019 to 4.5 percent of its GDP:

--eliminating all applied bilateral tariffs in Africa;
--keeping rules of origin simple, flexible, and transparent;
--removing all nontariff barriers on goods and services;
--implementing the World Trade Organizations's Trade Facilitation Agreement to reduce cross border time and transaction costs tied to nontariff measures; and
--negotiating with other developing countries to reduce their tariffs and nontariff barriers by 50 percent.

Africa faces an urgent need to create jobs in higher productivity sectors by developing a strong manufacturing sector. This will not be achieved, however, if constraints to doing business such as poor governance, low institutional quality, and inadequate infrastructure continue to limit firm survival and dynamism. At the current rate of labor force growth, Africa needs to create about 12 million new jobs every year to prevent unemployment from rising.

African Debt a Growing Problem But Not a Crisis

Project Syndicate published on 23 May 2018 an analysis titled "The Debt Challenge to African Growth" by Abebe Aemro Selassie, International Monetary Fund.

Much of the commentary on African debt recently has been hyperbolic, but there is a growing problem. Sub-Saharan Africa is confronting a pronounced rise in public debt. At the end of 2017, average public debt in the region was 57% of its GDP, an increase of 20 percentage points in just five years. Six of the region's 35 low-income countries (LICs) are in "debt distress," meaning they are unable to service external commitments. A further nine LICs are classified as being at "high risk of debt distress."

The author argues that if Sub-Saharan Africa is to take full advantage of the current global economic upswing, policymakers must tackle public-debt vulnerabilities head-on while they can. Doing nothing will only constrain the region's potential to achieve sustainable and inclusive growth.

Some African Traders Leaving China

Pambazuka News published on 9 March 2018 a commentary titled "African Traders in China: Is the Honeymoon Over?" by Daouda Cisse, independent researcher based in Canada.

In the last couple of years small numbers of African traders living in China have been leaving. The author argues that those who are leaving are concerned about overstaying their visas compounded by a more difficult business climate following the drop in world commodity prices. China's economic restructuring reportedly is not a significant factor.

US-African Partnerships

The Institute for Defense Analyses published in December 2017 a paper titled "U.S.-African Partnerships: Advancing Common Interests."

The paper summarizes the presentations at a conference held in September 2017 co-sponsored by the Africa Center for Strategic Studies, the Institute for Defense Analyses, the National Intelligence University, the Office of the Director of National Intelligence and the US Institute of Peace. It considers economic relations, security, governance, terrorism and democracy. It also looks at the situation in Libya and Somalia and the impact of China's engagement in Africa.

African Economic Outlook 2017

The African Development Bank, the Development Centre of the Organization for Economic Co-operation and Development, and the UN Development Programme published on 22 May 2017 "African Economic Outlook 2017: Entrepreneurship and Industrialization."

This annual massive study reports that in 2016, Africa's economic growth slowed to 2.2 percent from 3.4 percent in 2015 due to low commodity prices, weak global recovery and adverse weather conditions, which impacted agricultural production in some regions. Africa's economic growth is expected to rebound to 3.4 percent in 2017 and 4.3 percent in 2018.

Although economic headwinds experienced in the last two years appear to have altered the "Africa rising narrative," the African Development Bank believes the continent remains resilient, with non-resource dependent economies sustaining higher growth for a much longer period. With dynamic private sectors, entrepreneurial spirit and vast resources, Africa has the potential to grow even faster and more inclusively.

China's Economic Slowdown and Impact on Africa

Asia Times published on 14 February 2017 an article titled "Will China's Economic Slowdown Impact Africa?" by John J. Metzler, UN correspondent.

The author noted that since 2014 China's economic slowdown and lower global commodity prices have resulted in less Chinese trade by value with Africa and lower investment in Africa.

African Economic Outlook 2016

The African Development Bank (AfDB)has published its "African Economic Outlook 2016."

It is useful to compare this report with the International Monetary Fund (IMF) report posted below on 25 August. AfDB covers all of Africa while the IMF looks only at Sub-Saharan Africa (SSA). Both reports agree that Africa's growth rate in 2015 was about 3.5 percent, but the AfDB is more optimistic about the growth rate in 2016. The IMF says the SSA growth rate will be about 3 percent while AfDB says for all of Africa it will be about 3.7 percent. Including North Africa in the AfDB number does not account for the different projections.

IMF Evaluates Economy of Sub-Saharan Africa

The International Monetary Fund (IMF) published in April 2016 its "Regional Economic Outlook for Sub-Saharan Africa: Time for a Policy Reset."

It concludes that economic activity in sub-Saharan Africa (SSA) has weakened markedly, but, as usual, with a large variation in country circumstances. Growth for the region as a whole fell to 3 and one-half percent in 2015, the lowest level in 15 years, and is set to decelerate further in 2016 to 3 percent. The IMF believes that the medium-term growth prospects for SSA remain favorable. However, to realize this potential, a substantial policy reset is critical in many areas.