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China vows to keep funding African infrastructure projects despite debt-trap claims

Thursday September 5, 2019
Jevans Nyabiage  

China's top diplomat, Yang Jiechi, meets President Uhuru Kenyatta in Nairobi, the Kenyan capital, on Wednesday. Photo: Handout

China has promised to continue funding infrastructure projects under the Belt and Road Initiative in Africa, despite growing criticism that the investments burden countries with debt.

President Xi Jinping’s special envoy, Yang Jiechi, said during his trip to Kenya that Beijing is committed to continue partnering with Kenya and other African countries through the belt and road, a multibillion dollar plan by the Chinese government to link China, Europe and Africa through investments in rail, roads, ports, dams, power plants and bridges.

Yang, who delivered a special message from Xi to Kenyan President Uhuru Kenyatta, said infrastructure projects under the umbrella of the belt and road and the Forum on China – Africa Cooperation, an official forum between China and African states, were aimed at fostering intra-Africa commerce and inter-regional trade between Africa and Asia.

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Beijing has funded and built the Standard Gauge Railway, which, like the Addis Ababa-Djibouti railway, is part of the belt and road, which aims to re-create the ancient “Silk Road” that connected Europe to Asia.

The US$3.2 billion first phase of the rail, from the coastal port city of Mombasa to Kenya’s capital, Nairobi, was completed in 2017. The second section, connecting Nairobi to Naivasha, a town in the Central Rift Valley, is nearly done, at a cost of US$1.5 billion.

The plan is for the railway to reach Malaba, a town on Kenya's western border with Uganda, where construction will continue into Uganda and other landlocked countries in the Great Lakes Region.

But the problem is Kenya has yet to secure funding for the third phase of the railway that will link it to Kisumu and on to the Malaba border crossing. At that point, Uganda would take over construction to extend the line to Kampala and beyond.

During last year’s meeting in Beijing of the Forum on China – Africa Cooperation, Kenya failed to get China to loan it the funds it needed to extend the rail to Kisumu.

China had said Kenya needed to redo a feasibility study to prove the project’s commercial viability before it would release the funds.

For the rail to make business sense, it must reach Uganda, to connect with South Sudan and Rwanda and possibly to the mineral-rich Democratic Republic of Congo.

Sensing the funds’ release was being delayed, Kenya had announced it would upgrade its century-old metre gauge railway to Malaba on the border with Uganda.

On Tuesday, although the statement released after the meeting did not indicate whether China had agreed to advance the US$3.8 billion loans needed for the Kisumu link, Yang, a Politburo member and head of the Communist Party Office of Foreign Affairs, said the railroad was needed to develop industries on a wide scale in Africa and create jobs.

"The infrastructure projects Kenya has undertaken with Chinese funding, Kenyan President Uhuru Kenyatta said, are helping to connect the region, attract investment and create jobs"

“With the railway, we can have industrial parks, all kinds of trading activities,” China’s top diplomat said during his meeting with Kenyatta at the State House in Nairobi.
“With the railway there will be easy access, efficient access of products to markets either in Africa or in China or in other continents.”

At the meeting, Kenya pushed for Beijing to open its market to allow more Kenyan products. With avocados recently gaining access to the expansive Chinese market, Kenyatta said he would like to see even more Kenyan products, especially tea and coffee, on Chinese shelves.

Kenyan avocado farmer Simon Kimani tends to his crop in Kandara, central Kenya. With avocados recently gaining access to the Chinese market, Kenyan President Uhuru Kenyatta wants to see even more Kenyan products on Chinese shelves, he told China’s top envoy Yang Jiechi. Photo: AFP

Yang promised that China is working on opening up the Chinese market to added Kenyan items to narrow the trade imbalance between the two countries.
Beijing is the largest bilateral lender and trading partner with the east African nation. Last year, China exported US$5.19 billion of goods to Kenya while buying $173.96 million of its products.

Kenyatta also said Kenya’s cooperation with China has allowed his country to make strides in its development and has helped it and the region open up for more trade.

The infrastructure projects Kenya has undertaken with Chinese funding, he said, are helping to connect the region, attract investment and create jobs.

“We need to really now focus on how we can work together to get our private sector, our investors to work more closer together,” Kenyatta said in a statement.

“How do we attract Chinese investors, manufacturers, industrialists and other businesspeople to invest in Kenya?”

Sierra Leone president Ernest Bai Koroma (second from left) visits the site of a mudslide near Freetown in 2017, after landslides struck the capital of the west African state. A China-funded US$400 million airport project commissioned by Koroma was cancelled after his 2018 election defeat. Photo: AFP

Through Yang, Kenyatta invited Xi to visit Kenya during the Chinese leader’s next visit to Africa.
From Kenya, Yang heads for West Africa and Nigeria, Africa’s second-largest importer of Chinese goods. Nigeria bought US$13.4 billion of goods from China last year.

The Chinese official also will go to Sierra Leone, ostensibly to mend fences with the West African nation in the wake of its cancellation last year of a US$400 million China-funded airport project.

The new airport had been commissioned by then-president Ernest Bai Koroma but was cancelled by the new government after Koroma’s March 2018 election defeat.

The special Chinese envoy is in Africa as Beijing faces growing competition in Africa from countries such as Japan, the United States, France, Russia and the United Arab Emirates, all of whom would like a piece of Africa’s resources and product markets.

A train arrives at the Nairobi Terminus on the outskirts of Kenya's capital on the China-financed Standard Gauge Railway line in 2017. Kenya has yet to secure funding to link the railway to Kisumu and on to the Ugandan border, a necessary step in boosting the line’s potential to unlock industrial development. Photo: Reuters

For instance, early this year, the administration of US President Donald Trump unveiled its Prosper Africa Initiative, which aims to support US investment in Africa.

Last year, Trump created a US$60 billion agency – the US International Development Finance Corp – to respond to China’s growing influence in Africa and South America.

Japan has also made it clear that it intends to take on Beijing in Africa by encouraging its companies to invest in the continent, where it sells its investments as “quality alternatives” to Chinese ones.

Beijing also is fighting criticism from the West that its lending practices in Africa are a “debt trap”, offering loans to countries that cannot afford to repay them.

China has dismissed the accusations, saying it is helping Africa to grow while other countries are abandoning the continent.

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