Beijing has announced a plan to invest $60bn across the African continent in the next three years as it presses ahead with its Belt and Road Initiative launched earlier this year.
Chinese Premier Xi Jinping confirmed the news at the Forum on China-Africa Cooperation, which takes place every three years.
Without offering full details at this stage, Xi instead discussed how some of the funding would go toward emergency food aid provisions, agriculture, training and vocational programs and scholarships.
A third of the $60bn figure would comprise new credit lines, and $15bn would go to grants and interest-free and concessional loans. A further $10bn would be for “development financing.” Xi said that he welcomed the idea of private investment flowing into Africa as he looks for an additional $10bn to support his plans.
While it is not yet known which countries are likely to benefit most from this news, China’s clear plan to push its Belt and Road Initiative forward suggests that countries along significant trade routes can expect to see the most developmental funding to create new roads.
In his keynote speech, Xi said that the routes chosen would have to enable positive conditions in each country, with inclusivity and beneficial outcomes at the heart of the movement. The “Walk Together Toward Prosperity” speech highlighted the intention to deliver a trade route that helps Africa just as much as it would China.
Noting that “Africa is an extension of the Belt and Road development historically and naturally an important participant in the initiative,” Xi went on to say that these plans are merely about expanding trade between the two regions and would carry no political interference nor the imposition of demands for any government in Africa.
The main areas for consideration under the initiative are immediately improving the infrastructure where it is most necessary and tackling the constraints that make this difficult. Xi said that he wanted to work “with funds used where they are needed most.”
However, the plan has come under some scrutiny from both home and abroad, as some have criticized it for loading too much debt onto the African region, which has historically struggled to free itself of much of the debt of the last few centuries.
With some analysts warning that the African continent could become a “debt trap” under China’s plan, Special Envoy for Africa Xu Jinghu responded by saying: “It’s senseless and baseless to shift the blame onto China for debt problems.”
She suggested that China and Africa would work together and create studies that investigate suffocating debt problems that can stifle financial growth and cause a spiral of selling off assets. “Development prospects” would be taken into account to give a fairer assessment of what is necessary to get projects off the ground, which would “help African countries achieve sustainable development and avoid debt or financial problems,” Xu added.
Malaysian Prime Minister Mahathir Mohamad was one to voice his concerns. He said that Malaysia could not encourage “a new version of colonialism” and has canceled some $20bn of infrastructure projects with China. Mohamad also noted that just because “poor countries are unable to compete with rich countries,” this did not have to mean the saddling of more debt onto poor countries to stimulate development.