Choosing the lesser evil

While many detractors see China's US$60 billion infrastructure funding offer as a possible debt trap, local analysts say the Asian giant is acting no differently than former colonial powers in Africa.

06 September 2018 | International

The tug-of-war between east and west for Africa's resources appears to have swung China's way after its president, Xi Jinping, put US$60 billion on the table to assist the continent with infrastructure development, with “no political strings attached”.

The offer at the just-ended Forum on China-Africa Cooperation (FOCAC) summit in Beijing, which was attended by 50 African leaders, including President Hage Geingob, has raised the spectre of a possible debt trap.

Political commentator Ndumba Kamwanyah felt Namibia did not have an investment agenda prior to the FOCAC summit.

“China has the upper hand in the direction, justification and application of that partnership. They (African leaders) took nothing to the summit but their begging bowls. It is in this context that Namibia stands to gain nothing from the Chinese loans in the long-run. All we are gaining is debt that our government is incurring for future generations,” he said.

In Sri Lanka a massive pile of debt led to that country handing over an entire port to China in December 2017, on a century-long lease.

Now Djibouti, home to the United States' military main base in Africa, looks set to cede control of another key port to a Beijing-linked company.

In both countries, China's Belt and Road Initiative, under which the U$$60 billion is also now being offered, led to massive debts that Sri Lanka and Djibouti could not repay.

Other local analysts said while China is being referred to as a neo-colonialist, its actions are no different from what the European Union (EU) and the US have attempted to do in Africa.





“Like China, other cooperation partners, such as the EU and her member states, provide a combination of grants in the form of budgetary support and preferential loans. The US, through Pepfar, has provided substantial financial resources for combating the spread of HIV and Aids,” said independent analyst Klaus Schade.

He, however, did caution that policymakers would have to closely scrutinise loans from China.

“China's loans are often conditional on the procurement of Chinese goods and services and such conditionality has to be factored in when calculating the total costs of a loan.”

Schade felt that doing business with China would be beneficial, if there were investments in the manufacturing space, as opposed to transport, which was enjoying particular attention as part of the Belt and Road Initiative.

He added that for Namibia to benefit, local companies would need to be the drivers and beneficiaries of Chinese-funded projects.

“Namibia needs investment in manufacturing industries that complement existing industries, diversified exports and/or substitute imports,” Schade said.

Economics professor Roman Grynberg said China was no different than Africa's past colonial masters, but added it was using a different modus operandi.

“It wants resources but it has a different modus operandi. It does not normally create colonies, but does send its people in very large numbers,” said Grynberg.

Like Schade, he also cautioned the Namibian government to scrutinise any Chinese loans to avoid falling into a debt trap.

“If leaders in Africa do not carefully scrutinise the projects proposed by China and Chinese firms, we will end up with many white elephants, and we will have to repay what was borrowed.

“If those projects are poor and do not result in rapid growth, then we have only ourselves to blame for the debt trap we will eventually create,” Grynberg said.

“The Chinese who come are not colonialists, but simply immigrants and behave as such. They are aggressive and seek out business opportunities and many of the honest opportunities are in Namibia's interests.”

While at the summit, Geingob and his South African counterpart, Cyril Ramaphosa, jumped to the defence of the Chinese, dismissing the notion that they are neo-colonialists.

“Where others saw Africa as a source of wealth, where others saw Africans as slaves, China saw commonalities and the potential for long-lasting friendship,” Geingob said, with Ramaphosa adding: “We are dealing with partners that are not arrogant or pushy, but who want to engage with us.”

Meanwhile, it was reported that western countries are using aid to Africa as a smokescreen to hide the “sustained looting” of the continent as it loses nearly US$60 billion a year through tax evasion, climate change mitigation, and the flight of profits earned by foreign multinational companies.

“The common understanding is that the UK 'helps' Africa through aid, but in reality this serves as a smokescreen for the billions taken out,” said Martin Drewry, director of Health Poverty Action, one of the NGOs behind a 2014 report.



OGONE TLHAGE

Similar News

 

Genocide negotiations 'too slow'

1 day - 16 July 2019 | International

In Germany there is no doubt about the suffering that imperial Germany caused Namibians, says Daniel Günther, the president of the Bundesrat of the Federal...

Sudan transition deals sees delays

2 days ago - 15 July 2019 | International

Thousands of Sudanese protesters have poured onto the streets of Khartoum and other cities to mark the 40th day since the deadly dispersal of a...

US 'concentration camps'

2 days ago - 15 July 2019 | International

United States Vice-president Mike Pence visited an overcrowded migrant camp in Texas on Friday, coming face to face with detainees held in horrific conditions, and...

Call for Libyan ceasefire

1 week ago - 08 July 2019 | International

The UN Security Council called on Friday for a ceasefire in Libya as the death toll from a three-month offensive on Tripoli reached 1 000,...

Botswana govt to appeal gay rights ruling

1 week ago - 08 July 2019 | International

Botswana's government will appeal a June high court ruling that decriminalised homosexuality, the attorney-general said on Friday.Abraham Keetshabe, the government's chief legal advisor, said he...

New hope for Sudan

1 week ago - 08 July 2019 | International

Talks between Sudan's ruling generals and protest leaders, held after weeks of standoff following a deadly crackdown on protesters, entered a second day Thursday with...

Toddler rape sparks protest

1 week ago - 08 July 2019 | International

Thousands of protesters marched in Yangon on Saturday as outrage over the rape of a two-year-old spilled onto the streets following a viral online campaign...

Looking for El Chapo's billions

1 week ago - 08 July 2019 | International

Prosecutors on Friday said they were seeking US$12.7 billion from convicted Mexican drug kingpin Joaquin 'El Chapo' Guzman, based on a conservative estimate of revenues...

SA govt to review single-use plastic policy

1 week ago - 08 July 2019 | International

The SA government is reviewing its policy on single-use plastics and intends to complete this process by the end of this financial year.In a written...

23% of NDF soldiers women

3 weeks ago - 25 June 2019 | International

With 23% representation, Namibia is amongst the SADC countries with the highest proportion of women in its defence force.This is according to deputy prime minister...

Latest News

Keeping up with the neighbours

3 hours ago | Economics

LuandaYou would need around US$2 535.97 in Windhoek to maintain the same standard of living that you can have with US$7 600 in Luanda, assuming...

88 schoolgirls fall pregnant in...

3 hours ago | Education

Eighty-eight learners, including two girls in Grade 7, fell pregnant in the Oshana Region during the first term of 2019. Oshana governor Elia Irimari...

Stop blaming Aawambo - Kapofi

3 hours ago | Government

Home affairs minister Frans Kapofi has cautioned against tribalism and pointed out that there is a growing perception that only the Aawambo are beneficiaries of...

Mom begs for mercy

3 hours ago | Justice

A mother of three minor children is asking the High Court to reduce her four-year prison sentence, or fine her instead, after she pleaded guilty...

Relevant IFRS themes: Anytime, anywhere

3 hours ago | Business

A good understanding of International Financial Reporting Standards (IFRS) is crucial to the financial reporting process of IFRS reporters. Banks and Insurers in particular have...

Standard Bank faces strike vote

3 hours ago | Labour

ELVIRA HATTINGH Members of the Bank Workers Union of Namibia (Bawon) are to vote on whether to strike...

Let us tread carefully

3 hours ago | Opinion

When expectations are not met, citizens wronged in this regard should have channels, means and ways to air their grievances and have them addressed effectively.In...

Big banks target South Africa's...

3 hours ago | Business

Emma Rumney - South Africa's biggest banks are betting cut-price accounts, big mortgages and offers on everything from Adidas backpacks to Xboxes will help them...

Zim inflation almost doubles, stirring...

3 hours ago | Economics

MacDonald Dzirutwe and Karin Strohecker - Prices of cooking oil and other basics soared in Zimbabwe as inflation nearly doubled in June, piling pressure on...

Load More