From September 4 to 6, 2024, the Forum on China-Africa Cooperation (Focac) was held in Beijing, attended by around fifty African leaders. The Chinese President promised "financial support" of $50 billion to Africa over the next three years.
Beyond political rhetoric, African leaders are expecting concrete measures, while Chinese authorities primarily focus on political gains.
China is Africa's largest trading partner. In the first half of 2024, Beijing traded $167.8 billion with the African continent.
In addition to this trade volume, Chinese President Xi Jinping promised financial support of $50 billion over three years. The goal is to strengthen economic and financial cooperation between China and African countries. Half of this amount will be in the form of loans, which will continue to increase Africa's debt to China.
According to Xi Jinping, these additional $50 billion will create "at least one million jobs" on the continent. "China is ready to deepen its cooperation with African countries in industry, agriculture, infrastructure, trade, and investment," Xi Jinping declared during the opening ceremony before his African peers.
Several investment contracts were signed on the sidelines of this forum.
Has trade with China helped or harmed Africa?
China has $134 billion in outstanding loans with African countries, stemming from the money it has lent for development projects. It holds about 20% of Africa's total debt to the rest of the world.
However, recent loans and investments by China in Africa have experienced a slowdown.
This is because many African states have struggled to repay loans for infrastructure projects built by China in their countries.
China was happy to lend money for projects in Africa, such as railways, which Western countries and the World Bank would not have financed due to their commercial senselessness. However, today, many African countries have found that these projects do not generate enough revenue to repay the loans.
Therefore, Chinese lenders in Africa are now more discerning, seeking projects more likely to be funded.
China no longer only proposes large infrastructure projects such as roads, railways, and ports to African countries but also provides high-tech products such as 4G and 5G telecommunications networks, space satellites, solar panels, and electric vehicles.
China's initial goal was to import as many raw materials as possible from Africa to produce goods for global export.
China often tied loan repayments to African states' raw material export revenues. These agreements have allowed China to gain control of several mineral mines on the continent.
In the end, only a few African countries truly benefit from Chinese investments. It is up to African states to come together to define a strategy that will limit China's influence. Smaller states must also unite to benefit from this influx of investment.
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