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China unveils Sh6tr kitty to drive Africa’s development

James Momanyi @jamomanyi

China’s President Xi Jinping yesterday unveiled a new $60 billion (Sh6.03 trillion) kitty for Africa’s development as the country moved to increase its influence in the continent, which has the largest number of developing countries in the world.

According to a statement, the money will be channelled to projects aligned to the Chinese government’s Belt and Road Initiative covering telecommunications, construction of roads, bridges and sea ports, energy, and human capacity development.

The funding is broken down into several parts with $15 billion (Sh1.05 trillion) being categorised as government grants, $15 billion (Sh1.50 trillion) as interest free loans and $20 billion (Sh2.0 trillion) of credit lines and $5 billion (Sh0.5 trillion) for financing imports from Africa. 

President Jinping also challenged Chinese private companies to directly invest upwards of $10 billion (Sh1.0 trillion) in Africa in the next three years. The Chinese leader was speaking while opening the 2018 summit of the Forum on China-Africa Co-operation (FOCAC)  at the Great Hall of the People. The forum was attended by several African leaders including President Uhuru Kenyatta.

President Jinping said China is proud of its partnership with Africa, adding that he is ready to inject more impetus into efforts to alleviate poverty, create employment and better the lives and wellbeing of the people of Africa. He said that global governance needs to be reformed to give a voice to the majority of the world which is the developing world including all African countries.

“China and Africa can forge a stronger comprehensive and strategic partnership. China promises to engage with Africa on a principle of sincerity and real results,” said President Xi Jinping.“China’s 1.3 billion people and Africa’s 1.2 billion want a shared future,” said the Chinese leader as he promised that no obstacle will be allowed to hold back the ‘joint march’.

Listing Kenya’s Standard Gauge Railway (SGR) line from Mombasa to Nairobi as one of the key success stories from the China-Africa partnership, President Xi Jinping said that China had invested a sum of $170 billion in Africa in the last three years.

He added that the Road and Belt Initiative – the framework within which his country seeks to grow its trade and investments in Africa – China looks at building mutually beneficial relationships with African nations driven by a desire to achieve shared prosperity for the future good and well-being of mankind.

President Xi Jinping, however, reiterated that the funds set aside for the African continent are not for “vanity projects” but rather to build infrastructure that can remove development bottlenecks that have been bedeviling the countries over the years.

“China’s co-operation with Africa is clearly targeted at the major bottlenecks to development. Resources for our co-operation are not to be spent on any vanity projects, but in places where they count the most.”

Earlier, President Xi Jinping had told a business forum between Chinese and African leaders that China’s investment in Africa came with no political strings attached. “China does not interfere in Africa’s internal affairs and does not impose its own will on Africa. What we value is the sharing of development experience and the support we can offer to Africa’s national rejuvenation and prosperity,” he said.

Despite the glamour and huge investment outlay, the Chinese leader fended off mounting pressure over China’s “debt-trap” diplomacy that has ensnared most African countries.

Beijing’s cumulative loans to Africa since 2000 amounted to $124 billion by 2016, according to figures compiled by the China-Africa Research Initiative (CARI) at Johns Hopkins University School of Advanced International Studies in the United States.

Kenya alone has increased its debt stock by 52.8 per cent to Sh478.6 billion in 2017, from Sh313.1 billion in 2016, making China as the country’s largest bilateral lender.

President Xi Jinping also shrugged off perception that the huge financial outlay is meant to create a corridor into Africa’s mineral resources to feed its own booming economy and that Chinese companies’ excursion to Africa is geared towards creating employment for their people.

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