The FOCAC summit provides an opportunity to look at the challenges of the partnership
Since its establishment 18 years ago, the Forum on China–Africa Cooperation (FOCAC) has upheld the principles of extensive consultation, joint contribution and shared benefits, and has helped in the area of infrastructure in many African countries. To date, China-Africa cooperation under the framework of the forum has also become a strategic instrument for partnership for growth and development. That perhaps explains why expectations are high as this year’s summit opens on Monday in Beijing with many African leaders, including President Muhammadu Buhari expected to attend.
The essence of the 2018 FOCAC is to deepen China-Africa friendly cooperation, according to President Xi Jinping who has over the years harped on the values of friendship, justice and shared interests. The expectations from the summit include writing a new charter for integrating the Belt and Road Initiative with the development of Africa, setting a new path for Sino-African cooperation and helping to further cement the relationships between the two peoples. Along this direction, the summit will adopt two outcome documents with a series of bilateral cooperation agreements between China and several African countries, including Nigeria.
In May this year, the Central Bank of Nigeria (CBN) and the Peoples Bank of China (PBoC) signed an agreement on a transaction valued at Renminbi (RMB) 16 billion or the equivalent of about $2.5bn. The currency swap deal means that the Chinese Yuan now ranks with the dollar, Euro and to a little extent, pounds sterling as a second currency in Nigeria. Aside the fact that the deal shields Nigerian businessmen from the vagaries of third currency fluctuations, it is now also easier for Chinese manufacturers seeking to buy raw materials from the Nigerian market to obtain Naira from Chinese banks to pay for their imports.
Meanwhile, the 2018 edition of FOCAC could not have come at a more auspicious moment. Given the disposition of the current American President Donald Trump, the United States is becoming increasingly less important than China and the European Union in terms of trade and investment on the continent. A 2017 McKinsey report states that there are no fewer than 10,000 Chinese–owned companies in Africa today. Many of these investments, according to the report, “increasingly contribute to job creation, skills development, and the transfer of new technologies, practices more generally associated with Western business norms.”
However, with the aggressive manner in which China pursues the implementation of the Belt and Road Initiative both at home and abroad, there are also concerns that about 14 per cent of sub-Saharan Africa’s total debt stock is being held by China. Before his last visit to Africa where he learnt of his sack on Twitter, former American Secretary of State, Mr Rex Tillerson had accused China of using “predatory loan practices” to undermine growth and development on the continent even though by helping to develop the infrastructure, China is actually helping the economies of many of these countries.
At the last count, China is believed to be financing well over 3,000 infrastructure projects across Africa with about $90 billion in commercial loans. But the main challenge is that with the Chinese policy of non-interference in the affairs of other countries, accountability is not demanded of the African leaders in the manner to which they deploy these loans. That is an issue that needs to be addressed if the people on the continent, and not the political leaders, are ever to benefit from the debts that are already piling up for future generations to repay.
However, it is most fitting that some of the issues on the FOCAC agenda this year include the promotion of policy coordination, financial integration and people-to-people bonds between China and Africa, especially in the areas and directions that have a stake in creating employment opportunities and inclusive growth.