Earlier this year during a discussion with alumni of the American-funded Young African Leaders Initiative programme, US Secretary of State Antony Blinken inferred a “Chinese debt trap”. This was undoubtedly a ploy to discredit and cast doubt on the many loans and investments that China is currently undertaking on the African continent.
The above statement does not take into consideration that, if we break down African countries’ foreign debt, multilateral financial institutions and commercial creditors hold more than three-quarters of the total debt. This was just one example of the kind of disingenuous and inept attempts by the US to create conditions that are not favourable for effective co-operation and investment in Africa.
One such platform that will enable co-operation, meaningful dialogue and accelerated investment in Africa is the Forum on China-Africa Co-operation (FOCAC) that will be held in Dakar, Senegal, from the November 29 to 30, 2021.
The theme of the conference will be “Deepen China-Africa Partnership and Promote Sustainable Development to Build a China-Africa Community with a Shared Future in the New Era”. FOCAC this year will adopt four resolutions: the Dakar Action Plan (2022–2024); the 2035 Vision for China-Africa Co-operation; the Sino-African Declaration on Climate Change; and the Declaration of the Eighth Ministerial Conference of FOCAC.
FOCAC is a triennial high-level forum between China and all the states of Africa. It provides an organising mechanism for Chinese foreign policy towards Africa. It has always put agriculture as one of the investment priorities and as such it seems fitting to use the upcoming FOCAC meeting as a platform to sort the wheat from the chaff in terms of investment partners for co-operation and progressive development of the African continent. To make a better analysis of this, we need only look at the history of FOCAC.
Since it was first held in 2000, FOCAC has played a key role in policy and stance co-ordination between China and Africa and witnessed dynamic and booming trade and investment between the two sides. The first official FOCAC was held in Beijing in 2006, following two major ministerial conferences in Beijing and Addis Ababa in 2000 and 2003.
The red “C” on the left wing of the FOCAC logo represents China, while the whole logo is the letter “a,” representing Africa. The logo stands for solidarity and co-operation between China and Africa, with the green colour symbolising peace and development, and the red indicating vitality and prosperity.
China has grown to be a warm friend of Africa and as such, we have seen practically the advancements made over the years in the China-Africa relationship. Here are some important talking points when speaking about China’s investment and trade relationship with Africa.
China is Africa’s biggest source of foreign direct investment – investment surged from $75 million in 2003 to $2.7 billion in 2019. Chinese FDI flows to Africa have exceeded those from the US since 2014. China’s direct investment in Africa hit $2.59bn in the first nine months of 2021, up 9.9% year on year, outpacing its overall outbound direct investment by 3 percentage points and exceeding the pre-pandemic level in 2019.
At the 7th FOCAC meeting in 2018, China announced its decision to expand imports of non-resource products from Africa, and selected cotton and sugar, two cash crops with great potential for China-Africa co-operation, as co-operation priorities. Between 2013 and 2018, 45% of China’s foreign aid went to Africa.
China’s investment in Africa has exceeded $43.4bn. In 2020, China's direct investment to Africa rose to $2.96bn, compared with $2.71bn in 2019, even with the adverse investing environment due to the outbreak of Covid-19.
Speaking at a seminar with SAIIA on November 4, Chinese Ambassador Chen Xiaodong expressed quite poignantly the investment attitude of China in saying: “First, rather than unilaterally pursuing a surplus, China is committed to optimising our trade mix with Africa. Second, China moves forward co-operation with Africa on the basis of complementarity and not resource extraction.
Third, China is actively fulfilling debt relief commitments to African countries, and there is no so-called ’debt trap’. Fourth, China-Africa co-operation will not drive up pollution, because we pursue green development together. We have seen a sizeable investment in infrastructure by China across the African continent.
This kind of investment is important because it creates a platform to maximise the establishment of value chains and domestic markets across the African continent.
This is also a welcome reprieve in light of the African Free Trade Area. The roads, airports, railways, ports, hospitals and all kinds of infrastructure being built by China will stand us in good stead for the development of intercontinental markets. On the flip side, you would be hard-pressed to find a road built by the US.“
Mzukisi Qobo, head of the Wits School of Governance at the University of the Witwatersrand, highlights three areas that are likely to be important at the FOCAC:
1. co-operation on trade, using the African Continental Free Trade Area as a basis for broadening agreement;
2. digital technology – China is likely to “aim to draw Africa to its digital orbit on the back of technology co-operation and possibly development assistance that is tied to the use of Chinese technology”;
3. supporting Africa’s economic recovery through ramped-up development assistance and sectoral co-operation, encompassing both agriculture and industrial sectors.
Ultimately, whatever the discussion is at FOCAC on Monday, we can be sure that the discussion regarding any post-pandemic recovery will be focused on sustainability for both China and Africa. The sustainability of any co-operation will be definitely look at the various conditions and advancements in fields such as health, investment and trade, industrialisation, agricultural modernisation, climate change and the digital economy.
Practical co-operation in the digital economy, public health care and urban facilities has helped African countries ease the adverse impact of the virus. China has also offered large-scale humanitarian support to African countries, including vaccines, medicines and trained personnel.
At every forum, it has always been identified that agriculture and food security are priority areas for China-Africa co-operation. Due to its rapidly growing population and vulnerable farming conditions, food shortage is becoming more and more serious in Africa. Which is why there is an urgency for us to literally and figuratively sort the wheat from the chaff.
Agriculture is the backbone of many African countries’ economies, with about 58.02% of Africa's population living in rural areas. FOCAC's primary goal is to help Africa achieve food security and enhance Africa's capacity to address its food issues independently.
Agricultural production co-operation has gradually expanded to post-production activities such as processing, storage and transportation of agricultural products, inspection and quarantine, and has continued to expand to sharing and exchanges of agricultural development policies. China has helped African countries build grain warehouses and other storage facilities to reduce post-production losses, construct rural roads and trading facilities to facilitate the circulation and sale of farmers’ harvests, build start-up processing factories to increase the added value of agricultural products, and set up agricultural technology demonstration centres with the aim of achieving sustainable effects of agricultural aid programmes through the long-term operation of enterprises in Africa.
In our bid to sort the wheat from the chaff, we once passed a ban on chicken imports from the US. This would have been a major boost for the SA poultry farmers, as well as a huge public health victory. Instead of dialogue, discussion and co-operation, our government was given an ultimatum to rescind the ban or face the wrath (Agoa) of the US. We need to be more steadfast and resolute about strengthening our progressive relationships. FOCAC is one such platform to do that.
* Buyile Matiwane is the deputy-president of the South African Students Congress.
** The views expressed here are not necessarily those of IOL and Independent Media.