China’s loans to African countries have been questioned with experts saying China is here to actualize self-interests. This featured prominently in discussions at the 2019 Kampala Geopolitics Conference in Makerere University.
Ingo Badoreck, the Konrad-Adenauer-Stiftung (KAS) director Rule of Law programme in West Africa says although it is completely legitimate to have infrastructure developments on the continue, there is a complete imbalance of power between China and the African countries.
China is by far, the largest investor on the continent injecting over US$2.2 billion annually. Badoreck says although being the largest investor is not a bad thing, African countries need to be aware of China’s strategic interests, in order to be able to negotiate the deals in the continent’s interests.
“Chinese government has funded the railway construction between Mombasa and Nairobi to cost 3.6 billion euros. That money will be paid over the next 30 years. That means Kenya will not be in position to make independent fiscal decisions, on the basis of the projected income because they are bound to pay these cheques back,” Ingo Badoreck says.
He adds that the Chinese loans are completely underestimated by many African leaders given the looming debt crisis with currently US$648 billion about 20% of external debt for African countries belonging to China.
Economic Policy Research Centre (EPRC) research fellow Dr Madina Guloba compares China’s investment models with Uganda to Ethiopia where both African countries are heavily investing in infrastructure with the help of the Chinese government.
She says while there is citizen’s full involvement towards financing the infrastructure projects in Ethiopia, the model is different from Uganda. According to Dr Guloba majority of the infrastructure in Uganda built using Chinese loans are not connected to production meaning it will be difficult to recoup the money back to finance the loans.