China has pledged a $60 billion fund to bolster industry, counter hunger, and enhance security in Africa, a continent that has been chronically plagued by piracy and terrorism.
In his inaugural address at the Forum on China-Africa Cooperation (FOCAC), President Xi Jinping was authoritative in messaging that Beijing had become the locomotive of Africa’s all-round progress.
He listed eight focal areas of funding that would premise the emergence of the “China- Africa community with a shared future in the new era”.
Ahead of the presidential address, Chinese officials had cited a 2017 study by McKinsey, a U.S. consulting firm, which had spotlighted that China has become Africa’s most important and unrivalled economic partner.
“Across trade, investment, infrastructure financing, and aid, no other country has such depth and breadth of engagement in Africa,” the report observed.
Among the eight verticals flagged on Monday, President Xi highlighted China’s intent to set up additional economic and trade cooperation zones to promote industrialisation in Africa. Local currency settlements, instead of hard currency usage such as the U.S. dollar, would be encouraged to settle transactions.
‘Debt trap’ diplomacy
For financing, China will nudge African countries to tap new multilateral lenders such as the Asian Infrastructure Investment Bank (AIIB), the New Development Bank (NDB) of the emerging economies, as well as the Silk Road Fund marshalled by China.
The Chinese have taken umbrage against allegations of involvement in “debt trap” diplomacy, by saddling smaller countries with unplayable loans, and using them as levers for political gain. President Xi stressed that out of the $60 billion that were on offer, $15 billion would be disbursed as aid, interest-free loans and concessional loans. A $20 billion credit line would be established, while another $10 billion would be channelled into a special fund for China-Africa development. A $5 billion special fund will also be set up only for African imports.
China would also support Africa to achieve “general food security by 2030,” Mr. Xi said.
He pointed out that energy, transport, telecommunications and tapping cross-border water resources would be on China’s radar in the next phase of Africa’s infrastructural forays. Unlike the past, President Xi openly flagged Beijing’s intent to bolster African security.
Peace and security fund
China, he said, would set up a peace and security fund in partnership with Africa. Apart from military aid to the African Union, Beijing will support countries in the Sahel region and others bordering the piracy-ridden Gulf of Aden and Gulf of Guinea. China has already established a naval base in Djibouti on the edge of the strategic Gulf of Aden, which links the Red Sea and the Arabian Sea.
Mr. Xi said 50 China-Africa security assistance programmes will be launched under the flagship Belt and Road Initiative (BRI). He also flagged a China-Africa “green envoys programme” that would muscle Africa’s capacity for environmental management, pollution prevention and control, as well as green development.
A China- Africa environmental cooperation centre will be set up where research on environmental issues will be conducted. Amid loud applause, President Xi announced that China will train 1,000 high-calibre Africans, provide 50,000 government scholarships, sponsor seminars and workshop that would benefit 50,000 Africans, and invite 2,000 African youths to visit China for exchanges.
