February 28, 2023
BEIJING – Continent benefits as initiative helps pull in foreign investment
Ten years ago, when China proposed the Belt and Road Initiative, Andrew Gatera, then a college student in Beijing, could hardly imagine it would play such a big role in his career in Africa.
Gatera returned to his native Rwanda after completing his bachelor’s and master’s degrees in Chinese literature and culture at the Communication University of China in Beijing.
He started a tourism business in 2017 offering international visitors safari tours and treks in Rwanda’s volcanoes and other East African regions. With his fluency in Mandarin, Chinese tourists have become his biggest and most important customers.
To further tap China’s large consumption market, Gatera has also launched a specialty coffee business and is preparing for an exhibition in Central China’s Hunan province in June.
“The BRI has brought lots of opportunities to different countries and built relationships between partner countries, making it easier to do business with Chinese,” he said. “Moreover, there are a lot of successful projects in Africa set up by Chinese people that bring real benefits to the local people.”
This year marks the 10th anniversary of the BRI proposed by President Xi Jinping. So far, 151 countries and 32 international organizations have joined the initiative, according to official figures.
Nasser Bouchiba, president of the Africa-China Cooperation Association for Development, said China has been helping to build national infrastructure, upgrade industries and improve people’s lives across the world over the past decade.
“The BRI has become a popular international public good and a platform for international cooperation, and brings huge benefits to the world, especially to countries that aspire to development in Africa,” he said. “In the future, the BRI projects will be more specific and clearer to better align with the needs of various countries.”
Ehizuelen Michael Mitchell Omoruyi, executive director of the Center for Nigerian Studies at the Institute of African Studies, Zhejiang Normal University, described the BRI as “a novel worldwide development model”.
“The BRI, with the development of African nations, sets a new path for a higher level of China-Africa cooperation that will help to increase foreign investment, expand trade, ultimately reduce poverty, and in turn reshape Sino-African cooperation by supporting connectivity in and between economies in Africa,” he said.
Within 10 years, he said, the BRI has become a key platform that has proved to be economically effective. For example, inadequate transportation infrastructure has long been a major economic huddle for Africa’s industries and exports because high transport costs lower the competitiveness of goods. He also noted China’s rail infrastructure construction in Africa, which has improved trade and transport services among African countries.
“When the West came to the continent, they developed a lot of infrastructure leading out of the continent. China has done the reverse by leading infrastructure inside,” he said, citing examples such as the Ethiopia-Djibouti, Mombasa-Nairobi, Abuja-Kaduna, and Lagos-Ibadan lines. The various rail infrastructure is internally connected.
“Supporting African nations to promote infrastructure development under the BRI has helped to connect African nations internally and promote intra-trade,” he said.
Clayton Hazvinei Vhumbunu, a lecturer in the Department of Political Studies and Governance at the University of the Free State, Bloemfontein, South Africa, said that, for Africa, the BRI has brought funding opportunities in key priority development areas of infrastructure development, industrialization, and intra-African trade, which are all reflected in the African Union Agenda 2063, as well as in regional and national development strategies.
In the energy sector alone, China has funded more than 36 projects, mainly hydroelectric and solar power plants, in at least 19 African countries. Some of these BRI energy projects are high-impact and high-transformational. For example, the Caculo Cabaca Hydropower Project in Angola’s Kwanza-Norte Province is being built by China Gezhouba Group, he said.
Vhumbunu said the BRI focus on energy may be timely for Africa’s industrialization agenda as the continent’s energy deficit is slowing production in agriculture, mining, manufacturing, and other sectors.
“The BRI, if strategically engaged by African countries, may turn out to be the elusive match to ‘light up’ Africa at a time when over 640 million people out of Africa’s 1.4 billion population do not have access to electricity,” he said, adding that about 77 percent of people worldwide living without electricity are in Africa.
He said there is great potential for cooperation between China and Africa under the BRI framework; for instance, in the telecommunication sector. Internet penetration in Africa is still slow when compared to other regions.
Only 22 percent of Africans are internet users, compared with 80 percent in Europe, 68 percent in Central Asia, 66 percent in Latin America, and 44 percent in the Asia-Pacific and the Arab states, according to International Finance Corp, a global development institution focused on the private sector in developing countries.
“This will go a long way to connecting people and facilitating the digitalization of continental trade, which increases the scale, scope and speed of trade in goods and services at a time when the commercially meaningful trade under the African Continental Free Trade Area is envisaged to commence,” Vhumbunu said.
Omoruyi said another area that impressed him is that the infrastructure investments, specifically in railways, coupled with the establishment of special economic zones in several African nations under the BRI, have succeeded in encouraging positive spillovers and unlocked economic potential in value-adding industries across the continent through the complementary nature of trade-facilitating infrastructure and export-oriented industrial zones.
“Through the construction of railways, manufacturers can reduce the cost of sourcing inputs, lowering the overall cost of doing business and permitting them to remain competitive in both the domestic and regional markets,” he said. “The expeditious implementation of railways in Africa is, therefore, a positive development for the manufacturers and the broader business community.”
The free trade area, industrial parks or special economic zones could be a major engine to connect Africa with the international market, Omoruyi said. He suggested China also focus more on infrastructure construction in Africa to help propel the free trade area, which has a market of more than 1 billion people and a combined GDP of more than $3 trillion.