“Not For Vanity Projects”: Xi pledges another $60 billion during the FOCAC 2018 Summit
Since 2009, China has been Africa’s largest trading partner and the latest Forum on China–Africa Cooperation (FOCAC) shows that the East Asian giant shows no signs of stopping. Earlier this week, China pledged an additional $60 Billion package of aid, investments, and loans to the continent. While pledges have risen markedly during each FOCAC Summit from $20 billion in 2012 to $60 billion in 2015’s Johannesburg edition, China’s decision to maintain current levels of investment in the continent perhaps signals that China now feels its role as Africa’s new go-to partner is firmly ensconced.
But should African countries be wary? Malaysian Prime Minister Mahathir Mohamad recently warned against “a new version of colonialism” following a visit to Beijing last month after suspending a $20 billion Chinese-built rail project. China loaned approximately $125 billion to the continent from 2000 to 2016, according to data from the China-Africa Research Initiative at Washington’s Johns Hopkins University School of Advanced International Studies. Chinese investment in Africa, however, does not come without criticism. Given that 40% of low-income countries now in debt distress or are now in risk of defaulting, China has garnered criticism for predatory loan practices wrapped up in “debt trap diplomacy.” During the FOCAC summit, President Xi denied this claim stating, “resources for our [Africa-China] cooperation are not to be spent on any vanity projects, but in places where they count the most”.
China pledged $60 billion during the last FOCAC summit in 2015, which President Xi shared had been delivered or arranged. This year’s $60 billion financial package has taken a more diversified approach.

China pledged to also write off outstanding debts for indebted poor African countries, especially poorer regions in Central Africa and island nations. Additionally, China will implement eight major initiatives with African countries over the next three years and beyond, encompassing fields such as industrial promotion, infrastructure connectivity, trade facilitation, green development, capacity building, healthcare initiative, people-to-people exchange initiative and a peace and security initiative.
From the UK’s Theresa May to France’s Emmanuel Macron and China’s Xi Jinping, Africa has been the subject of renewed interest from global powers keen to cement their commercial footprint and diplomatic relations with the region. As foreign powers court their attention, African governments must leverage this opportunity to negotiate better terms with Chinese entities, including better technology and skills transfer to ensure that domestic industries accelerate their ability to competitive in the global economy.

Harriet Kariuki is a Research Analyst at Botho Emerging Markets Group, a leading investment advisory firm.
Thanks to Akinyi
