The interests of African citizens can be strengthened in investment deals with China by ensuring agreements are transparent, technical experts are involved, and the public is engaged.
The asymmetries in power between China and its African partners are immense. Nigeria, Africa’s largest economy with a GDP of roughly $500 billion, is a fraction of China’s GDP of $14.3 trillion. China is Africa’s largest trading partner, with trade growing 40-fold in the past 20 years. China is also Africa’s single biggest creditor, holding 20 percent of the continent’s debt. African countries borrowed around $143 billion in combined Chinese state and commercial loans between 2006 and 2017.
African countries make up half of the 50 nations that are most indebted to China, with Djibouti, the Republic of the Congo, Niger, and Zambia topping the list in terms of share of GDP. These countries demonstrate how spiraling debt with China can have a ripple effect on shrinking African leverage. Zambia is a case in point. In 2020, it appealed to China to restructure $11 billion in loans. China, however, insisted that all its arrears be cleared as a precondition, a demand Zambian President Edgar Lungu had no leverage to resist. Other lenders whom Zambia had asked for bailouts suddenly became reluctant to offer the country concessions as they might be used to pay arrears to Chinese creditors. According to Ken Ofori, Ghana’s finance minister, China’s approach to debt negotiations disadvantages its highly indebted partners as it makes other creditors nervous that “their released resources will simply be transferred to Beijing.”
Spiraling debt with China has a ripple effect on shrinking African leverage.
Fears that unsustainable debt could cause African countries to lose control of their national assets are also growing. In 2018, the Kenyan public was shocked when a leaked report from the auditor general revealed that the strategic port of Mombasa had been put up as a sovereign guarantee. That is, its escrow account would be surrendered to China’s Export-Import Bank if the Kenyan government defaulted on its $3.2-billion loan for the Mombasa-Nairobi Standard Gauge Railway. In Zambia, worries that Chinese firms will seize key assets to recover debts frequently make the headlines, with the local power utility, ZESCO, and the international airport being cited in a flood of angry media reports since 2018.
Concerns over imbalance have been raised over other facets of Chinese investments as well. For example, many African commentators note that Chinese firms, which currently dominate African construction tenders, mainly hire Chinese labor and import Chinese material in multibillion-dollar projects. The common understanding is that African countries give in to such practices because the financing, impact assessments, and project execution are all done by Chinese entities. Saying no to China means that the money might go elsewhere.
The issue of corruption often features prominently in these agreements as African government leaders tend to negotiate opaque deals that benefit them personally or extend their patronage network. African leaders, therefore, are less inclined to write more stringent standards of accountability and local ownership into these agreements.
Given the paucity of empirical data, the secrecy of Sino-African negotiations, and the widely varying motivations of African leaders, it’s hard to generalize how this imbalance plays out in individual countries. For instance, a 2017 study by McKinsey found that of the 1,000 Chinese firms in 8 African countries that receive the lion’s share of Chinese labor-intensive investments, 89 percent of the laborers were African. A study conducted over 4 years by the University of London’s School of African and Oriental Studies found that in Angola and Ethiopia—high-profile countries for Chinese investment—the local participation rate of African labor is 90 percent and 74 percent respectively.
Nevertheless, as many details of these agreements remain tightly held between African leaders and their Chinese counterparts, it’s hard to say how these deals benefit African citizens. That concerns about harmful practices continue to be raised underscores very real fears about the lopsided nature of these engagements. Consequently, a growing number of Africans do not view the relationship as a “mutually beneficial partnership” (hùhuì huǒbàn guānxi, 互惠的伙伴关系) as is often promoted.
Given the challenges inherent within this imbalanced power relationship, how can African citizens effectively assert agency over their national interests?
How African Governments Exercise Agency
African countries have used different tools to gain leverage in their imbalanced ties with Beijing. Some, like Djibouti, opt to play China against its competitors. In exchange for Chinese investments, Djibouti uses its strategic location at the crossroads of Africa and the Middle East to offer China an opportunity to gain influence over shipping lanes connecting it to the Suez Canal, a key node of its Belt and Road Initiative. Djibouti plays a similar balancing act with other external powers, including the United States, knowing that their need to maintain military bases on its soil is unlikely to diminish, giving Djibouti unique leverage.
Neighboring Ethiopia follows a similar logic. It has used its strategic position in the Horn to Africa to exploit the Gulf rivalry for regional influence by bolstering ties with Saudi Arabia and the United Arab Emirates, as well as their principal rivals in the region, Turkey and Qatar. These countries, along with Israel, have invested heavily in Ethiopia to counterbalance one another, allowing Ethiopia to reap benefits as the largest recipient of Gulf financing in the region. Ethiopia has also engaged in aggressive outreach to the European Union and United States but kept parallel relations with China. In recent years, it forged a strategic relationship with the European Commission and negotiated major investments from the U.S. International Development Finance Corporation. In December 2020, Ethiopia received a $9-billion injection from Western donors, the International Monetary Fund (IMF), and the World Bank.
In Benin, Botswana, Côte d’Ivoire, Liberia, Senegal, and Sierra Leone, technical departments manage negotiations with Chinese entities, while the presidency takes a back seat.
Ethiopian officials have also indicated that Western financing was more predictable and “did not cause debt distress.” Prime Minister Abiy Ahmed went further by saying that borrowing from the World Bank and IMF were like “borrowing from one’s mother.” China, which holds $14 billion (roughly half) of Ethiopia’s debt, took note of these signals and became more amenable to Ethiopia’s requests. In April 2019, it canceled Ethiopia’s interest-free loans.
Other countries assert agency by improving how they negotiate. In Benin, Botswana, Côte d’Ivoire, Liberia, Senegal, and Sierra Leone, technical departments manage negotiations with Chinese entities, while the presidency takes a back seat. This fosters a disciplined approach, holding both the donor and recipient accountable, and discourages the personalized deal-making common in such negotiations.
Such measures helped Côte d’Ivoire win surprising concessions in 2018 while negotiating a $580-million hydropower project with Chinese energy giant Sinohydro. Only 20 percent of the workforce could be Chinese, all building materials would be sourced locally, and the working language would be French. Such benefits might not have been realized if a few well-connected individuals had been left to dominate the negotiations.
In Liberia, since the administration of Ellen Johnson Sirleaf, all contracts are outsourced to independent international accounting firms to discourage undue high-level interference from start to finish—a model that has also been used in Senegal, Togo, and Tunisia.
External partners are required to respect this rule, regardless of their influence with the president. Notably, Chinese firms played by the rules in all four cases, suggesting that Africans can exert agency in the national interest via their external relationships.
The impasse in 2019 between Tanzania and China Merchant Holdings International (CMHI) over the $11-billion Bagamoyo Megaport Project shows how China’s sensitivities about its public image can also be leveraged to assert agency. CMHI pushed a hard bargain: a 99-year lease, zero duty on imported material, a commitment by Tanzania not to develop other ports, and tax breaks for investors in a proposed special economic zone. Tanzania angrily publicized the details to build pressure and outmaneuver the Chinese position. “Only a madman can accept such terms,” said President John Magufuli, adding, “We will not be treated like schoolchildren.” With the public on board, the government countered: a 33-year lease, no tax holiday, no duty-free imports, full regulatory oversight, and no restriction of Tanzania’s right to develop other ports. CMHI read the mood and accepted all the new terms, partly to save face and partly to defuse a brewing diplomatic crisis with one of China’s most important partners in Africa.
Ignored but Growing: Popular Agency
In recent years, African citizens have found more platforms to assert their agency. Independent African analysts have identified best practices to enhance African countries’ leverage vis-à-vis China. These include defining a China strategy, building more in-house expertise on China within bureaucracies, and closer collaboration among African countries. Popular pressure also comes from groups dealing with the human rights implications of Chinese investments. In October 2020, a Ghanaian environmental coalition led by the NGO A Rocha Ghana lodged a complaint at the High Court in Accra to stop a $2-billion infrastructure-for-natural resources deal under which Sinohydro would develop roads, hospitals, housing, and rural electrification in exchange for refined bauxite. The complaint claims the deal violates citizens’ right to a clean and healthy environment for current and future generations.
In Zimbabwe, the government banned coal mining in national parks in September 2020 after three weeks of protests demanding the withdrawal of Chinese mining licenses in Hwange National Park. This campaign was led by the Zimbabwe Environmental Law Association (ZELA), which also lodged an urgent appeal at the Harare High Court. Under the country’s Freedom of Information law, ZELA is also monitoring the $3-billion Chinese-funded Sengwa coal power plant on the public’s behalf by demanding and publishing status reports on the project from Zimbabwe’s energy regulator and the Ministry of Mines.
In Kenya, a June 2020 Court of Appeals ruling found that the new Standard Gauge Railway from Mombasa to Nairobi—a flagship project of the Belt and Road—was illegal. This came after years of strategic litigation by the Kenya Law Society dating back to 2014. These legal battles were supported by extensive media reporting on widespread corruption in the project. Influential industry leaders affiliated with the powerful Kenya Chamber of Commerce and Industry also lent their voice, amplifying calls for greater scrutiny of the Kenya-China relationship. This forced the government to launch an investigation leading to the arrests of several Chinese and Kenyan managers.
While the project had been completed by the time of the Court ruling, a precedent has been set that will enable civil society to apply pressure on the government to adhere to standards of transparency. In part due to heightened public scrutiny, China declined to extend the Standard Gauge Railway to the Kenya-Uganda border.
Sharing Lessons to Enhance African Agency
The picture that is often painted of uniform African acquiescence to Chinese interests is misleading. African agency is evident in the growth of independent platforms on China-Africa relations and within civil society, particularly groups working on economic justice, debt, and extractive industries. It is also apparent in the innovative tactics some governments employ to increase their leverage despite their relatively smaller economies.
African agency is evident in the growth of independent platforms on China-Africa relations and within civil society.
The power gap between China and African countries, nonetheless, is real. To rebalance this relationship, African countries need to be more transparent in negotiating with Chinese counterparts. Deals need to be considered in terms of how much they advance citizen interests, as opposed to the narrow personal interests of leaders. Citizens, after all, are responsible for paying off the loans African governments take on. Public engagement in negotiations is also vital. China is sensitive to how it is perceived. Therefore, publicly negotiated deals can lead to Chinese concessions to ensure perceptions of fairness. This is especially the case when public pressure is well-organized and widespread.
African countries can also learn from one another and harness best practices across contexts, for instance by building lessons on how the negotiation process can be made more professional and independent. This will require closer intra-African cooperation and tapping expertise and resources outside government. It can come in the form of knowledge of the Chinese negotiating style, language expertise, and analysis.
African citizen agency has been and can continue to be effected in engaging China. This does not happen automatically, however. Rather, it comes about when citizens and the media are involved, agreements are transparent, and experts are involved. This provides a basis from which African citizens can reshape the dynamic Africa-China relationship so that it is more beneficial.