Why The EU is investing in Africa | African Scramble Part 2 | China Vs The EU
The EU is planning to commit Billions of Euros for investment in Africa. Morocco on the northern edge of the continent has been told at an official visit by the president of the European Commission, in Morrocco’s capital that 1.6 billion will be invested into the country for screen and digital transmission.
This is odd, the last time Europeans went to Africa was for the spice and slave trade not to mention pillaging, colonising and stripping African tribes of their culture. But even in recent history, it is odd to see the EU investing in infrastructure outside of its own borders.
And on top of that, why would the EU’s highest-ranking official arrange a stable search for a seemingly mediocre amount of money, at least by EU funding standards?
A strategic move by the EU. These sums of money are only the beginning of the EU’s massive new plan that will very likely disrupt the balance of power not only in Morocco but in the whole of Africa, because in the coming five years as part of a worldwide 300 billion euros plan, dubbed Global Gateway, the EU is planning to commit up to 150 billion euros of that 300 billion to financially support green energy and digital infrastructure projects in various African countries. The beginning of the EU playing the game for global geopolitical influence.
Now, the obvious question is why?
Why would the EU be willing to commit such a massive amount of funds outside of its borders, especially in a time of such political and economic turmoil on the continent, not to mention the political and economic turmoil the EU is facing at home.
Well, the main answer is China is a since 2018. China as part of the Belt and Road Initiative, another strategic plan to gain economic influence around the globe. Its been evident over the last 4 years as the Chinese have been heavily investing in developing infrastructure in Africa. Along with these announcements, China has gained massive influence and the countries of this vast continent.
And if you look at this 2019 map that shows the inflow of Chinese investment in the African countries, you can see the true scale of this scattered around the entire continent.
It's not quantity over quality the Chinese are going for, as a lot of the investments are of massive scale and importance to not only trade in Africa but around the world.
For Instance, you have the railway line from Mombasa to Nairobi at the Addis Ababa Djibouti rail line arguably the flagship project of the Chinese connecting two of the most important parts of Africa on Basa and Djibouti, with two of the biggest financial centres of the continent.
This map shows the trade of the African countries with China in comparison to how it was at the start of the Millenium. China is well aware that in the next 5–10 years having this geopolitical influence over Africa will favour them in attaining geopolitical dominance around the globe.
What Is So Important About Africa
Africa’s continent consists of 54 countries, it's a vast amount of land with an incredibly diverse range of people, and abundant with resources. To accompany this the economic importance of the region is set to grow.
- Ethiopia
- Ghana
- Kenya
- Mozambique
- Nigeria
- South Africa
These six African countries are known as the Lion Economies. They have been booming. having a collective GDP of roughly a trillion US dollars, growth rates that these nations have been seeing for the past 10 years.
For instance, Ethiopia with constant system growth rates between 7 to 10%. The past decade was one of the world’s fastest-growing economies. The lion economy's growth rate is far better than that of The EU.
Looking into the future
2025 Africa will feature more than 100 cities with over 1 million people and by 2030 42% of all young people in the world will live in Africa, not to mention a rapidly growing middle class.
So what you end up with is a vast area with huge economic potential. For new markets to develop something China obviously wants a piece of and it’s not only the economic considerations that make the African countries so attractive in this battle for influence.
It’s also the two strategic aspects of it.
You see posts like Djibouti and the Gulf of Aden are of high geopolitical importance. Aden is in Yemen, a country that has been war-torn for just under 60 years.
These two regions are vital entry points for trade corridors. So considering the growing economic and geopolitical importance of the African countries, the EU’s plan to invest here starts making much more sense not to mention its growing worries about the Chinese prisoners and so many countries right at its doorstep.
But this is not the first time the EU is collectively channelling money to Africa. Although back then the money was to fuel controversial methods to handle the migrant crisis. That is still apparent today, In Africa, the very borders where The EU wants to begin investing.
But clearly this time things are different as the EU isn’t just responding to a crisis, rather it’s trying to actively engage on a world stage, and it seeks to start establishing itself as a major geopolitical player. Something that hasn’t been done in the last 500 years, as the EU felt like they didn’t need to engage on a world stage, due to the ever-fading perception the world has had about the EU, Europeans more specifically. For being civilised, enlightened, intelligent, innovative, cultural and militant.
The EU’s Big Plan
The EU has put together a plan from March 2020. In this document, the foundations for the EU strategy in Africa and a framework for future engagement are laid out. The first two stated goals, and arguably most pivotal are a partnership for a green transition and the policy for digital transformation.
What the EU is trying to do here is to combine this green agenda with geopolitical ambitions. And sure enough, the Global Gateway investment package for Africa prioritises these two sectors and if everything goes according to the current announced plan, the funds will be channelled towards investments in sustainable energy projects to protect against potential climate disasters and agricultural food systems, that the continent so heavily relies on. I do hope they are in time due to the food crisis fuelled by nitrogen price increases as well as other macroeconomic factors.
And not only that there are also plans for investments in digital infrastructure like for example, submarine and terrestrial optical fibres and data and cloud centres. Now, what’s so interesting about this plan is that it is completely different from China’s model of investing in heavy infrastructures like highways and railroads, as the EU doesn’t want to invest in roads and railways. The simple answer is, that area of development is heavily Chinese-owned, and China would leverage that area of infrastructure development too strongly for it to be beneficial for the EU.
There’s a lot of space for these markets to further develop and the EU wants to tap into that potential. But the EU is differentiating itself from China in another interesting way.
The funding model, in contrast to the Chinese model that heavily relies on loans and essential allegations about the debt trap diplomacy practice, the EU programme will feature a mix of grants and loans with very low-interest rates, also known as soft loans.
Now, despite the fact that the project hasn’t even started yet, it has already attracted substantial criticism to begin the whole premise of the project which makes it more about a confrontation with China rather than supporting the development of the African countries. Therefore I forebode a shitshow happening. The package has already been criticised for simply repackaging existing EU programmes into a new one without any significant innovation.
After working in marketing for a few years this looks like a PR run. In order for this to be successful, it needs to happen with the African leaders and people included as partners. In either case, what the future holds for Africa, China and the EU suddenly appears to be very interesting.
