Strategic, political and economic value will be decisive for the inclusion by China of African countries in the “Belt and Road” strategy, which will mobilise an investment of more than US$78 billion, according to university researchers.
Mandira Bagwandeen, a researcher at the Centre for African Studies of the University of Stellenbosch (South Africa), points out that investments already underway in Northeast and East Africa, particularly in countries such as Kenya, Egypt and Djibouti, show that the region is of significant importance for the implementation of the initiative.
However, according to the researcher, the “ambitions” of the initiative could lead to “investment incursions beyond those regions,” considering the success of the ongoing “trade facilitation projects before deciding to expand the project to more African countries.”
“This potential expansion would depend on whether the countries covered by the initiative have something to present, whether geo-strategic, geopolitical or geo-economic value,” says Bagwandeen.
A memorandum of understanding between China and the African Union signed in January 2015 plans to link the 54 African states through transport infrastructure projects, which is not officially part of the initiative but has been treated as such by African leaders and analysts
“By formally including the continent in the initiative, the initiative will attract more international attention, while the Chinese government is likely to accelerate and stimulate economic projects in Africa as a result. In addition to economic incentives, incorporating Africa into the initiative serves to strengthen Sino-African relations. However, only the African countries that are strategic to the initiative, especially those that are vital to establishing and strengthening trade links, will be prioritised by the Chinese government,” says Bagwandeen.
Chinese President Xi Jinping announced on Sunday in Beijing funding of 540 billion yuan (US$78.2 billion) for projects included in the New Silk Road Initiative, an infrastructure project with which China intends to strengthen its trade relations in Asia, Africa and Europe.
The President said that China will contribute an additional 100 billion yuan (US$14.5 billion) to the Silk Road Fund, set up in 2014 to finance infrastructure projects and provide aid over the next three years in the amount of about 60 billion yuan (US$8.7 billion) to developing countries and international organisations participating in the initiative.
Two banks – the China Development Bank and the Export-Import Bank of China – will also offer special loans up to 380 billion yuan (US$55 billion) to support the “Belt and Road.”(macauhub)