China’s commitment to Africa, which is in line with the popular saying “As iron sharpens iron, so does one nation sharpen another”, has grown exponentially in the last two decades, thanks to the launching in 2000 of the Forum on China-Africa Cooperation (FOCAC), which gave practical expression to the historic solidarity that has traditionally existed between Africa and China.
Despite the global upheavals that are affecting economic activities across the globe, China’s commitment to Africa continued to thrive. The commitment is the reason Chinese President Xi Jinping pledged $51 billion in funding at the ninth FOCAC meeting, including support for 30 infrastructure projects across Africa. The infrastructure projects will help China completely exploit the “economic complementarities” of African countries along the BRI routes in the process as it establishes a supply, industrial, and value chain that signifies a pivotal moment for promoting trans-Africa economic integration.
The infrastructure investment can contribute to employment opportunities and economic growth in African countries by helping locals develop their manufacturing capabilities through knowledge transfer and creating at least one million jobs while cementing China’s role as a leader of the Global South—a term that refers to developing countries around the world, of which African countries form a major bloc.
As a way of allowing African nations to enjoy the dividend of infrastructure development and avoid a debt crisis in Africa, at the 2021 FOCAC meeting, the Chinese explored new models of infrastructure development that include private sector participation in Africa’s infrastructure development. In the new model, China will encourage Chinese-funded firms to adopt models such as public-private partnership (PPP) and build, operate, and transfer (BOT) models to invest in the African industry for more localised production of African brands.
Since China is willing to provide more flexible and innovative infrastructure finance, such as PPPs and swap formula, especially if African governments request it, then it is worth noting that the PPP model coupled with the Chinese swap formula could solve Africa’s financial constraints and cut African nations’ dependence on raw materials, since in the swap formula, Africa’s resources could be directly converted into development projects. In this way, there are significant opportunities for African countries and China to complement each other’s goals.
While China is doing this, on the other hand, over the past decades, Western economies have made a significant amount of FDI across Africa without triggering a decisive industrial take-off or economic growth on the continent. The reason traditional Western investment has not been able to trigger decisive industrialisation takeoff and economic growth is that Western investment in Africa is mostly of a colonial genre that is envisioned to extract natural resources and exploit the local market for Western nations’ goods and services—and purposely to discourage industrialisation for the fear of competitors abroad.
Since FOCAC has increased bilateral trade, aid, and investment, political relations are more interconnected than ever before. This is of immense significance for Africa’s political and economic development. As a result, many African leaders consider China to be instrumental in solving their development challenges.
Meanwhile, the United States and the European Union are being pushed out of the picture and face a renewed need to reposition themselves strategically in the continent. In recent years, the FOCAC has played an increasingly significant role in the integration of Chinese and African economies, which are highly complementary and hold tremendous potential for bilateral trade and investment. Partly due to the FOCAC’s efforts in supporting and streamlining Sino-African trade, China is now Africa’s largest trade partner, with Africa-China trade reaching $282 billion in 2023.
Furthermore, Africa is a crucial partner in China’s Belt and Road Initiative (BRI), with Chinese investment in BRI-related infrastructure exceeding $120 billion over the past decade. Also, in 2022 alone, China has signed with twelve African nations exchanges of letters on zero tariffs for 98 percent of their export items to China. As a result, in the first quarter of 2022, trade between China and Africa surged by 23 percent, to $64.8 million.
Also, the data from the above source added that in the first six months of 2022, over $3 million out of the $10 million of credit facilities promised to African financial institutions has been delivered, and almost $2.5 billion of loans have been channelled to Africa’s priority programmes. To permit China’s contractors and African nations to continue to enjoy the dividend of infrastructure investment and avoid a debt crisis in Africa, on August 18, 2022, during the follow-up meeting on the Forum on China-Africa Cooperation that was held in November 2021, China ─ Africa’s largest bilateral lender ─ waived debt owed by 17 African nations for 23 interest-free loans that were due in 2021. At the 2021 FOCAC forum, China induced its pledge to Africa by 35 percent, an apparent demonstration of concern for Africa’s indebtedness to China.
Apart from waiving the debt owed, in the 2021 FOCAC meeting, China pledged $40 billion to infrastructure projects in Africa as part of China BRI and China-Africa Cooperation Vision 2025.
The context of the above commitment from China reinforces that there is great potential for China and Africa to create more “relief hope” in the next decade as the relationship advances. This “relief hope” provides a “golden opportunity” for African nations to break away from charity syndrome and move toward a more business-oriented approach which will serve as an effective catalyst for stabilising African economies, enhancing capacity for independent development, and improving people’s livelihoods. China’s commitment demonstrates that the nation has always followed the principle of practical results, sincerity, good faith, and affinity, and completely grasped the imperative to support Africa to boost its development. This is what is lacking in several advanced economies that are Africa’s partners. As a result of such dynamics, African elites generally consider China as their preferred long-term development partner, making Africa’s perception of China largely positive.
Therefore, with this new direction of development, African and Chinese governments should explore strategies to bolster Africa-China cooperation. This will require novel priorities in investment policy and promotion reforms. Chinese and African policymakers should reflect on the possible shift and let business realities guide their policy response, building on economic fundamentals. It will require realigning the investment regimes to the new national development priorities. Reforms may also be required to ensure the limitation or phasing out of crisis-related investment screening and approval mechanisms to permit FDI entry.
China’s growing involvement in Africa, highlighted by the Ninth Forum on China-Africa Cooperation (FOCAC), represents a pivotal shift since the Cold War. The summit emphasised African-led initiatives, aiming to empower the continent to address its challenges and achieve its aspirations. The commitments made are seen as transformative, signalling deeper collaboration rather than a slowdown. These developments underscore China’s role as a key development partner, with the potential to shape Africa’s future prosperity. African governments must sustain this momentum, ensuring these commitments are leveraged for positive outcomes while minimising the potential downsides of intensified engagement.
Dr Emmanuel Ikechukwu Umeonyirioha is an expert in Sino-Africa relations and the first Igbo language lecturer at the University of Oxford.
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