World leaders were in Beijing last month for a summit on the Belt and Road initiative: the sweeping infrastructural project aimed at expanding global trade links and connecting China by land and sea to the rest of Asia, Europe, and Africa.
Developing countries have welcomed the idea since it began six years ago in a bid to fund much-needed roads, trains, ports, and other facilities. Yet the high costs of these projects have prompted complaints that some nations are falling into a “debt trap,” with critics warning nations might have no choice but to hand over controlling stakes in strategic assets to China.
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While the BRI’s infrastructure is positioned to strengthen commerce, much of the conversation in Africa is still focused on trade deficits. Even as Sino-African bilateral exchanges have increased in the past decade and a half, imbalances continue to persist with African countries importing enormous quantities of consumer and light-manufactured goods as well as machinery and electronics. China, in turn, mostly buys minerals and metals from Africa since it doesn’t have enough natural resources of its own to meet its expanding industrial needs.
This has meant that some of the largest exporters to China from Africa have been resource-rich nations. In fact, as the most recent data from MIT’s Observatory of Economic Complexity shows, many of Africa’s most mineral-rich states currently rely on China for a sizable margin of their exports.
The minerals Beijing lifts include crude petroleum from Angola and South Sudan, zinc and copper from Eritrea, cobalt from DR Congo, raw tobacco from Zimbabwe, and iron and titanium from Sierra Leone.
Tying minerals to deals has proved precarious for nations. For example, in 2016, Angola was left with only one cargo to sell on the spot market, undermining its ability to raise cash.
China says it wants to fix the trade imbalance and help diversify imports from Africa.
President Xi also said they will support mechanisms to promote e-commerce cooperation and hold joint activities to market Chinese and African brands. Beijing also committed to setting up a $10-billion special fund for development financing.
One way Africa could capitalise on itself is to implement the continental free trade agreement, which drew enough signatures to go into operation early April. (