Belt and Road in East Africa
Robert Cole
Drivers along almost any major road into or out of Kenya’s capital city of Nairobi will notice two things: huge, heavily guarded construction projects focused on a new railroad, and billboards professing the close relationship between Kenya and China that made said project possible. This project represents “the biggest investment in Kenya since its independence” and is part of China’s global Belt and Road Initiative (BRI). The initiative uses Chinese loans and sponsored construction projects to increase Chinese diplomatic ties abroad and build a global commercial presence with China at its core. Chinese BRI projects stretch from Piraeus in Greece to Maputo in Mozambique to Jarkarta in Indonesia and constitute one of the largest foreign investment projects ever undertaken. Though it is truly global in scale, few places show the potential positives and negatives of the initiative so clearly as East Africa.
The potential for benefit is certainly enormous. Africa has largely been passed over for foreign direct investment, after spending decades under the colonial thumb of western governments, more focused on resource extraction than building civilian infrastructure. As such, Chinese money aimed at a truly “win-win” scenario at the People’s Republic claims could be the catalyst for a new age of African development. Chinese investors, backed by their government, have a much more significant appetite for risk than their western counterparts and are willing to invest in countries like Uganda and Rwanda where the political climate is seen as a deal-breaker by the US and its allies. In Kenya, China has become one of the largest job creators in the country, putting money in the pockets of workers and thereby helping to expand the nation’s middle class. Greater connectivity with the world spurred by BRI projects would also allow African countries to increase their export economy and increase economic activity. Infrastructure that speeds the transport of goods from the interior to coastal ports would increase the comparative advantage of African producers and make them more competitive on the world stage.
The Belt and Road Initiative is not, however, a perfect system and elements of it have been widely deemed as abusive toward the target countries, particularly in Africa. According to reports from the New York Times and several other Kenyan and international outlets, Chinese-funded projects are rife with accusations of persistent racism directed at Kenyan employees by Chinese managers. On a larger scale, there are concerns that China is engaging in “debt trap diplomacy” wherein it makes loans to poorer countries it knows they cannot hope to pay back, eventually seizing port facilities and other infrastructure as collateral. Indeed, East African countries have seen a sharp and concerning increase in debt owed to China, with Kenya and Djibouti both at risk of losing major port facilities to the Chinese government. Another risk comes from Chinese domestic industry itself. Though disputed, there is some evidence that China is engaged in large-scale dumping of industrial supplies like cement, glass, and steel into the African market in an effort to release domestic supply in light of falling domestic demand. African producers cannot compete on price with Chinese dumped goods, and fold under this new flood of supply. In Kenya for example, cement exports to other parts of East Africa fell by nearly 40% in 2017 thanks to Chinese dumping. As such, Chinese business practices in Africa run the risk of crushing local industry if it continues to use the region as a dumping ground to support its own flagging domestic economy.
On balance then, Belt and Road presents a challenge to the US and its allies, but also an opportunity. Refusing to engage with Chinese projects at all will only serve to drive countries closer to China and misses out on a key opportunity for cooperation. However, the US and other democracies should be wary of letting China set the tone of such projects, which often double as propaganda for its authoritarian model of government. On the whole, however, the initiative is still very young and its risks and benefits are far from certain. Global leaders should keep a close eye on the program and develop comprehensive plans to counter any harms BRI may generate, without becoming carried away by more hysterical predictions. Most importantly, more consideration should be given to the underlying problems that are leaving many countries in East Africa with nowhere to turn except China and how the international order has failed to solve them.