Belt and Road Initiative and Africa

By Bryonie Guthrie

Reviving the ancient silk road to foster trade and development between the East and West under China’s Belt and Road Initiative (BRI) has been grabbing headlines since its launch in 2013. Back in 2010，UNWTO formulated a similar concept to develop economies along the ancient Silk Road through promoting tourism. China, a member of UNWTO¹ and active member of their Silk Road Action Plan², assisted the UNWTO in funding this project through the China Development Bank. China has since developed its own initiative – the BRI. The BRI is a more sophisticated, holistic and inclusive version of the Silk Road Action Plan, which includes both the Silk Road Economic Belt and 21st Century Maritime Silk Road, and expands the areas of cooperation far beyond tourism. 

China’s aim with its revamped Silk Road concept, the BRI, is to develop the countries along the route. The African portion of that stands to benefit from the proposed infrastructure investment, estimated by HSBC³, to be up to US$1.1 trillion in funding from the Asian Infrastructure Investment Bank (AIIB), Silk Road Fund and the New Development Bank (BRICS Bank) over the next decade to 2030. 

Chinese and local employees work at the construction site of a rail project linking Nigeria's capital city Abuja and its northwestern state of Kaduna, Nov. 25, 2014. The China Railway Construction Corporation carries out the work on the country's first standard gauge railway line. [Photo: Xinhua]

While critics⁴ of the plan have called it an attempt to reorder the global economy in China’s favour and modern colonialism, they misunderstand the initiatives origins, i.e. that reviving the Silk Road was also a call of the UNWTO. Furthermore, China’s track record to date rather indicates a genuine desire to engage in trade and investment that is tangibly beneficial to both/all parties.  China recognises that its own future growth will depend on its trading partners being more economically diverse and efficient. Its plan⁵ with the BRI is to move 3 billion people into middle class status by 2050.

The BRI’s financial mechanisms, namely the Asian Infrastructure Investment Bank (AIIB⁶) and the Silk Road Fund, will fund projects in the following areas: Rural Infrastructure and Agriculture Development; Energy and Power; Environmental Protection; Transportation and Telecommunications; Water Supply and Sanitation; Urban Development and Logistics. Thus, there are synergies between BRI and the African Union’s Agenda 2063. BRI and Agenda 2063 goals are compatible, as will be discussed below, and even their time frames are similar – BRI has set 2050 as its target date for achieving its goals, Agenda 2063 aims for just 13 years later. 

The African Union’s Agenda 2063⁷, its vision for “The Africa we want” by 2063, has seven aspirations. The first of which is “A prosperous Africa based on inclusive growth and sustainable development” and recognises that this requires “Cities and other settlements are hubs of cultural and economic activities, with modernized infrastructure, and people have access to all the basic necessities of life including shelter, water, sanitation, energy, public transport and ICT” Aspiration two focuses on “world class, integrative infrastructure that criss-crosses the continent”. The economic benefits of achieving this level of development and integration are expected to be the growth of intra-African trade from less than 12% in 2013 to nearly 50% by 2045 and increasing Africa’s share of global trade from 2% to 12%. Agenda 2063 notes multiple forms of infrastructure needed on the continent but especially seeks to focus on ICT infrastructure, transport and energy. The BRI’s Silk Road Fund met with the African Development Bank and confirmed their priorities for Africa are aligned⁸.

The importance of the Silk Road Fund aligning with the African Development Fund is that Africa’s own priorities are driving the engagement between the parties in terms of BRI, which fits with China’s narrative that the BRI is meant to be an inclusive and mutually beneficial programme. In terms of Africa’s infrastructure priorities, the African Development Bank (AfDB) established the Connect Initiative⁹, which recognises the need or broadband connectivity across the continent and that development thereof will cost approximately US$6.4 billion. More fibre optic sea cables need to be laid but, while those grab public attention, last-mile infrastructure is equally important in providing for intra- and inter-state connectivity. This will allow land-locked countries to access the network as well. Without last mile connectivity, the real number of Africans online won’t change significantly. AfDB has initiated six regional projects to advance ICT access and connectivity, two of which are in East Africa and therefore on the BRI route. The continent seeks to develop ICT infrastructure to bring it up to par with the world and to facilitate e-commerce. Importantly, it is also a priority to being ICT infrastructure to schools across the continent and teach children about the transformative power of ICT for education and business development, among other things. 

Transport infrastructure is an obvious priority given that the legacy of colonialism was transport routes built only to Africa’s coast with the aim of getting resources out, now Africa seeks to develop road, rail and air routes between all its major cities and drive the movement of goods and people as efficiently internally as externally. Finally, Africa’s wealth of resources means it should be energy efficient if it is able to build the infrastructure required to source and then pool energy resources. In this regard, the AIIB is already funding solar power projects in Egypt¹⁰. 

The BRI’s geography means that North-East and East Africa will benefit the most from this initiative. There are key economic powerhouses in those regions, including Kenya, Egypt, Tanzania and Ethiopia. Importantly, it is also home to China’s first overseas military base, in Djibouti¹¹ – less an economic giant but a very stable country in a region of volatility. The base opened in August 2017. Although BRI seems to favour a specific African region over others, it must be borne in mind that it is a parallel process to FOCAC (Forum on China Africa Cooperation) and BRICS (Brazil, Russia, India, China, South Africa) both of which foresee broad and continent-wide development of Africa through its partnership with China and the other BRICS nations, and as a key stated objective of South Africa’s BRICS membership. The African Union has developed into a sophisticated continental body with clear and sensible goals for Africa’s common development. The Agenda 2063 aspirations make repeated reference to common values, unified positions, and Africa-wide development. Therefore, whatever BRI’s impact on Eastern Africa, the ripple effects will be felt continent wide. Infrastructure developed may initiate in East Africa but will be aimed inward at cross-cutting the continent and tie in with projects to develop infrastructure that are simultaneously taking place in each of the five major regions of Africa.

NEPAD¹², the economic arm of the African Union, supports infrastructure-led development. Achieving the ICT, energy and transport goals of Agenda 2063, in cooperation with BRI and the other parallel processes mentioned, will bear fruit in the form of increased manufacturing capability, exports, employment opportunities and trade, both intra-Africa and between Africa and China – already the continent’s largest single trading partner¹³.  

BRI will positively impact Africa because of China’s unique approach to this initiative – it is inclusive and takes on board the objectives and needs of its partner countries. In this way, it is not offering a pre-packaged deal in support of its own goals but a collaborative framework that aligns with its partners’ goals. BRI can work in Africa, and benefit even those nations not directly on its geographical path, because BRI aligns with the objectives of the continent and, most importantly, of the African Union. Africa’s power is in its unity and any programme that seeks to work in conjunction with the continental body has the potential to succeed on the continent. 

(Bryonie Guthrie is a former South African diplomat. Now she is an analyst with Acorus Capital, a Hong Kong-based consultancy with expertise in Africa.)

Reference:

1 Based on UNWTO Silk Road Programme website.

2 Based on UNWTO Silk Road Action Plan Survey 2014-2015. The survey is available on the website of The World Tourism Organization (UNWTO).

3 Based on HSBC Belt and Road.

4 Based on The Conversation, “Where Africa fits into China’s massive Belt and Road Initiative”, published 28 May 2017.

5 Based on "BELT AND ROAD BASICS", Hong Kong Trade Development Council.

6 Based on the website of the Asian Infrastructure Investment Bank.

7 Based on "Agenda 2063" from the African Union Commission Archives.

8 Based on “AfDB President rounds up Asian tour in Beijing with firm commitments for support”, published 29 March 2016. The article is available on the website of African Development Bank Group.

9 Based on "ICT Initiatives" from the website of African Development Bank Group.

10 Based on "Egypt Round II Solar PV Feed-in Tariffs Program" from the website of the Asian Infrastructure Investment Bank.

11 Based on “China formally opens first overseas military base in Djibouti”, published 01 August 2017 on Reuters.

12 Based on "Why infrastructure development in Africa matters", United Nations Africa Renewal.

13 Based on“China in the heart of Africa”,United Nations Africa Renewal.