Corruption Is Wasting Chinese Money In Africa

- Sep 14, 2018-

     om the 1960s on, China supported anti-colonial and anti-apartheid movements across Africa. When countries like Algeria, Sudan, and South Africa fought for liberation, Beijing supplied financial assistance and logistical support. As the decades passed, ideological ties morphed into shared economic, security, and strategic interests, resulting in one of the world’s most complex, and controversial, arrays of international partnerships.

Today, some see China as a neocolonial power eager to plunge African nations into debt, stripping their resources and their sovereignty. They point to cases such as Djibouti, where China owns about 80 percent of its public debt, which, in turn, has exceeded 86 percent of GDP, or Zambia, where some reports suggest unsustainable lending will soon lead to a Chinese takeover of the public electric company, ZESCO. (The Zambian government has refuted the claims.) In August, 16 U.S. senators voiced their concern about China’s efforts to “weaponize capital” in Africa and Asia in a letter to U.S. Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo.


Others, especially African leaders, see China as a flexible partner willing to engage, with parity, where no one else will. Chinese loans for infrastructure projects, a significant part of overall financial ties, have historically come with interest rates far lower and repayment terms far more flexible than those offered by the International Monetary Fund and other multilateral lenders, to whom many African countries owe the bulk of their public debt. Through Chinese lending, construction, and project management, Africa has gained bridges, roads, railways, dams, hydropower plants—the kinds of large-scale projects that can jumpstart industrialization and invigorate economies for years to come.

But two decades of financial data, evolving business and cultural ties, and the latest news from the just-concluded Forum on China-Africa Cooperation in Beijing suggest that the China-Africa relationship defies simple characterization. There may be an overarching Africa policy. But on the ground, China is engaged in a diverse set of bilateral ties, with the benefits for African countries driven in large measure by how well their leaders defend national interests.

And there’s good reason to be concerned about whether those interests have been well served. Opaque deals, reports of large-scale corruption and mismanagement, doubts about project feasibility, and a stark trade imbalance raise serious questions about how well African leaders are managing the opportunities they receive.

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