China's $51(CAD 72) billion wager: Investing in Africa's future
During the September China-Africa forum, Chinese President Xi Jinping committed to investing $51 (CAD 72) billion in Africa and eliminating tariffs for all developing countries, including 33 African nations. At the beginning of December of the previous year, China fulfilled the second of these promises.
Beijing asserts that its zero-tariff policy demonstrates a fair approach to African countries, offering concrete actions and promoting modernization, countering Western accusations that China exploits the continent without mercy.
China eliminates tariffs for African countries
However, not everyone in Africa is impressed by the duty-free trade policy. Many economists remind us that previous trade agreements between China and Africa have favoured the Asian economic power more than the African countries.
-This is nothing but expanding its influence in Africa, which will do little to help underdeveloped economies. It is rather a component of China’s competition with the United States in Africa, said Tadele Ferede from the University of Addis Ababa to the Polish Press Agency (PAP).
China becomes Africa's largest creditor
In the past 20 years, China has become the largest bilateral trading partner of Sub-Saharan Africa. Approximately 20% of exports from this region go to China, and about 16% of Africa's imports come from China, according to International Monetary Fund (IMF) data. The year 2023 was a record year for trade exchanges, with a total trade volume reaching $282 (CAD 400) billion.
Africa mainly sends metals, mineral products, and fuel to China—this constitutes about three-fifths of exports. On the other hand, it primarily imports electronics and machinery from China.
China has also become Africa’s largest creditor, providing funds for mining, energy, and infrastructure projects to the countries on this continent. As recently as 2005, China’s share in the total public debt of Sub-Saharan Africa was less than 2%, and by 2021, this debt exceeded $134 (CAD 190) billion, rising to about 17%. The most indebted African countries to China are Angola [$21 (CAD 29) billion], Ethiopia [$6.8 (CAD 9.6) billion], Kenya [$6.7 (CAD 9.5) billion], and Zambia [$6.1 (CAD 8.6) billion].
