(Yicai Global) Sept. 4 -- President Xi Jinping's Belt and Road initiative will be a game-changer for the development of infrastructure and connectivity in Africa, the president of the African Development Bank told Yicai Global.
China and Africa can work out detailed implementation plans for energy, infrastructure and other projects, as well as how to attract more Chinese companies to the continent, at the 2018 Beijing Summit of the Forum on China-Africa Cooperation now being held in the Chinese capital, according to Akinwumi A. Adesina.
The forum is an effective mechanism to help Africa develop faster and Adesina, who is making his second visit to China since taking office in 2016, expects to see more projects, he said. The two-day summit wraps up today.
China has extended billions of dollars in loans to fund Belt and Road projects in Africa, a continent that is "an extension of the Belt and Road development historically and naturally and an important participant in the initiative," President Xi said yesterday, Xinhua News Agency reported. Unveiled in 2013, the Belt and Road initiative is a 30- to 40-year plan to build a vast infrastructure and trade route embracing Asia, Europe and Africa. Xi also announced yesterday a further USD60 billion in financing for Africa.
Critics have pointed out that China's competitively priced loans to fund Belt and Road projects are adding to its African partners' debt distress. More than 70 percent of the loans have gone to fund infrastructure, which will promote economic growth that enables states to repay borrowings in the future, Adesina said, citing data from the multilateral development lender.
The average ratio of public debt to gross domestic product in Africa has risen 15 percentage points to 37 percent during the seven years before 2017, and yet according to Adesina, this is far lower than that of developed countries, some of which have reached one-and-a-half times their GDP. The debt-to-GDP ratio of emerging economies has also been over 50 percent, he added.
China has been helping Africa's development, Adesina said, while denying the Asian lender's agency in the African debt crisis with three examples, including two locomotive infrastructure projects spawning over 1,400 kilometers of track and industrial parks in Ethiopia.
Eastern Africa's Addis Ababa–Djibouti Railway will bring tremendous trading opportunities worth USD14 billion and Kenya's Mombasa–Nairobi Standard Gauge Railway facilitates regional connectivity. Infrastructure, especially railroads, is indispensable to regional integration, and will bolster the exports of Kenya, Ethiopia, and other countries, Adesina said.
The four countries of Senegal, Rwanda, Djibouti, and Ethiopia have developed greatly by fully leveraging Chinese investment, Adesina added. China's investment in Ethiopia has promoted the construction of local industrial parks, which helps the footwear and textile industries to become the most competitive in the continent.
African countries know their own needs, and no one can make decisions for Africa, Adesina said. These countries can deal with their liabilities while the African Development Bank, which is based in the Republic of Côte d'Ivoire, offers great help for them to better handle debt problems, he added.
Editor: Emmi Laine