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Money for Africa: How the EU and China are trying to win affection on the continent

(Image: Adobe Stock)

China and the European Union are in a race to invest in the continent in the form of aid, trade and loans, with the focus on the infrastructure market, where the competition is huge.

Barely three months have passed since the Forum on China-Africa Cooperation (Focac) took place in Dakar at ministerial level, but by the time the European Union-African Union (EU-AU) summit convened in Brussels on 17 February, this seemed like years ago.

Testing times

Relations between Africa and Europe were severely tested in recent times owing to ongoing instability in parts of Africa and the growing threat of a Russia-Ukraine war, which has occupied EU leaders in recent weeks.

Covid-19 has also continued to wreak havoc on diplomatic relations, after the identification of the Omicron variant in South Africa.

This led a number of countries, including those in the EU, to close their borders to travel from parts of Africa. The move was considered premature and discriminatory by African governments and scientists, because the variant was subsequently also identified in other parts of the world.

President Cyril Ramaphosa, who is also the AU’s champion on Covid-19, led a fierce attack on Europe (including the UK), likening their ban to colonialism.

Speaking at the Dakar International Forum on Peace and Security during his West Africa visit in early December, Ramaphosa said:

“As African presidents, we respect one another – but, from Europe, I just got a message that ‘we banned travel, thank you, goodbye. See you next time’. That’s not the way to conduct relationships.”

Ironically, China has maintained a strict lockdown since the start of the pandemic in early 2020 and, although travel to and from the country is severely restricted, it doesn’t discriminate against African countries.

There is also the refusal of the EU to budge on an intellectual property rights waiver – known in full as the The Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS – that would enable African countries to manufacture their own vaccines.

An entire session was dedicated to this in Brussels, but the EU has refused to budge. “What we have seen with complex mRNA technology is that the know-how and how to put this together is the key,” an EU official said. “To boil this down simply as a debate on the waiving of intellectual property rights is not the right solution.”

Instead, the EU was pushing for “a comprehensive approach, and working with partners to ensure the African continent has access to this. We bring not just quantity but quality.”

This last statement – quality over quantity – is also the essence of the value-add the EU is hoping to offer the continent in its competition with China, whose President Xi Jinping pledged one billion vaccine doses during his live-streamed address at Focac in 2021 – 300 million more than the EU is pledging to deliver.

Still, vaccine diplomacy could be hamstrung by vaccine hesitancy in many African countries, where Covid-19 hasn’t wreaked the same level of havoc on healthcare as it has in many countries with older populations.

China winning the investment race?

Money – investments, aid and trade – will possibly speak more loudly. The EU’s recent pledge of €150-billion in investments and loans to the continent at first glance seems to dwarf that of China, which has scaled down its investment pledges to the continent to $40-billion, from $60-billion at the 2018 Focac meeting.

It is important, because one of the first questions African journalists ask at summits of this nature usually revolves around money.

On the ground it is a different issue, as Chinese infrastructure development has taken place at such a speed that it now dominates the African continent.

The Economist recently reported that Beijing-backed firms have changed the transport map on the continent by investing in projects such as the Lagos-Ibadan railway line, as well as roads in large parts of eastern Congo, and revamped airports in a number of countries.

As recently as the 1990s, American and European companies dominated this space, with China getting hardly a mention.

Summits between Africa and the EU date back to 2000, six years before the first Focac summit.

The competition for the infrastructure market in Africa is huge, and the World Bank predicts that demand will be more than $300-billion a year by 2040.

China appears to be winning. Chinese firms are known for working fast and doing things cheaply, with no political strings attached, and although there is some prejudice against the quality of Chinese workmanship, this is changing.

Cobus van Staden, senior China-Africa researcher at the South African Institute of International Affairs, says it took the EU “a while to realise how far behind they are” in helping to finance infrastructure in Africa.

A report this month by the Washington, DC-based Center for Global Development found that Chinese development bank financing for African infrastructure amounted to $23-billion between 2007 and 2020, and it was two-and-a-half times more than all the other bilateral financing combined.

“China has managed all of these connections [with Africa] despite Xi not leaving the country since early 2020,” Van Staden says. Instead, he attended summits virtually and sent ministers to represent him.

Trade figures also tell an important story

Total trade between Africa and China amounted to $254-billion in 2021, overtaking trade with the EU, which totalled $250-billion.

“Trade with China will increase more rapidly [than with the EU] if you take into consideration the steps announced by China during Focac,” says Gert Grobler, former ambassador and senior research fellow at the Institute of African Studies at Zhejiang Normal University in China.

Changing style of relations

China’s relations with African countries have inspired a change in how Europe approaches the continent.

Relations have shifted from a patronage-style relationship, in which the EU polices human rights as a precondition for investment and aid, to an equal partnership, with good governance getting a mention only as far as it concerns safety and security.

French President Emmanuel Macron, whose government took over the six-month presidency of the Council of the European Union in January, has been trying to overhaul relations with African countries even further. He recently described these as “a bit tired”.

As part of a reset, he hosted a summit in Montpellier in October 2021, inviting only entrepreneurs and civil society actors, and no government leaders, as is usually the case.

There was an exchange of ideas in a number of smaller groups, and even the plenary was in the form of a conversation between Macron and young African thought leaders.

France’s hand could be seen in the format of the Brussels summit, which broke away from the emphasis on a long plenary. Instead, the large number of delegations were hosted in various round tables: financing; peace, security and governance; private sector support and economic integration; education and migration; agriculture and sustainable development; and health systems and vaccine production.

European money, however, often comes with its own agenda and doesn’t always reflect the AU’s priorities, wrote Frank Mattheis, research fellow of the United Nations University, in The Conversation.

There is the EU’s Global Gateway initiative, launched in 2021, which aims to mobilise up to €300-billion in investments by 2027 to assist a global economic recovery from Covid-19.

It is part of a new European strategy “to boost smart, clean and secure links in digital, energy and transport and strengthen health, education and research systems across the world”, the European Commission said in a press release at the time.

Ahead of the Brussels summit the EU announced a €150-million investment package in Africa over the next seven years as part of the Global Gateway initiative. This will be a joint effort by Team Europe, which consists of EU institutions such as the European Investment Bank, member states and their implementing organisations, development financing institutions and the European Bank for Reconstruction and Development. Team Europe was, incidentally, born from the EU’s Covid-19 response to support partner countries in their response to the pandemic.

The EU investment will focus on three key areas: infrastructure, education (which includes a focus on migration) and healthcare.

According to Mattheis, the emphasis here is more on EU priorities, such as “diversifying [Africa’s] energy sources, achieving climate goals, impeding migration and curbing the global influence of China and its Belt and Road Initiative”.

Grobler says Africa needs its international partners “and should position itself strategically and speak with one voice in an endeavour to extract the maximum benefit from its interactions with all its international partners”.

One of the AU’s top concerns recently has been infrastructure, as part of the African Continental Free Trade Area agreement that came into effect in 2021, and for which European economic integration has served as an important example. Money for peace and security is another.

With the continuing terrorist insurgency in northern Mozambique and in the Sahel, where the security situation has resulted in a number of coups in recent months, African citizens are feeling increasingly unsafe.

Even though there is an emphasis on finding African money for peace operations on the continent, partners such as the EU and China play an important role.

Other players

Other than China, the EU also has other competition for winning affection on the African continent. There have been summits between African countries and Japan, Turkey, the US and Israel, and there is another scheduled with Russia at the end of 2022.

An EU official said this week the body was worried about efforts by Russia “to destabilise parts of the world that [are] important to us” by means of the private security company Wagner Group’s involvement in conflicts in countries such as the Central African Republic and, more recently, Mali. “It is done with a degree of complicity by the Russian government,” the official said.

Incidentally, coup leaders from Mali, Burkina Faso, Guinea and Sudan were not invited to the Brussels summit, because their AU memberships have been suspended, but at any other summits with African countries, such as Focac, such restrictions would not apply, because the AU isn’t involved as a structure in these.

With citizens in some cases having welcomed the military takeovers, any such sanctions against attending summits could, ironically, turn popular sentiment against bodies such as the AU and the EU – and advantage countries such as China and Russia.

Ultimately, the EU might do well to focus less on trying to compete with China on funding and rather build its unique strength – promoting democracy and funding human rights organisations. It may seem unfashionable, but activists still face uphill battles in large parts of Africa. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.

 

 

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