On the Right Road
The Chinese-built Soubre Hydroelectric Power Station is inaugurated in Soubre, Cote d’Ivoire on November 2, 2017XINHUA
In 2013, an ambitious program by the Chinese Government known as the Belt and Road Initiative was launched, focusing on promoting policy coordination, connectivity of infrastructure and facilities, unimpeded trade, financial integration, and strengthened people-to-people ties through a consultative process and joint efforts, with the goal of bringing benefits to all. The Belt and Road Initiative or yidai yilu comprises the Silk Road Economic Belt and the 21st Century Maritime Silk Road.
The main reason behind the launch of the Belt and Road Initiative was to strengthen China’s connectivity with the rest of the world. The Belt and Road Initiative consists of two major parts: the “Belt,” which recreates an old Silk Road land route, and the “Road,” which is not actually a road, but a route through various oceans. The Belt and Road Initiative has emerged as China’s multi-billion-dollar initiative with gigantic marketing campaign to promote winwin cooperation across the globe. The Belt and Road Initiative targets five main areas: policy, infrastructure, trade, finance and people-to-people exchange. It combines new and old projects, covers an expansive geographic scope, and includes efforts to strengthen hard infrastructure, soft infrastructure and cultural ties.
Currently, the Belt and Road Initiative uptake has grown to include countries with a combined GDP of more than $23 trillion and more than half of the total global population. Last year, during the Belt and Road Forum for International Cooperation held in Beijing under the theme “Strengthening International Cooperation and Co-building the Belt and Road for Win-Win Development,” Chinese President Xi Jinping was confident that the Belt and Road Initiative will deliver greater benefits to people across the world. He also noted that, at the time, 68 countries and international organizations had signed the Belt and Road cooperation agreement with China, with roundtable discussions bringing together heads of the United Nations units, the World Bank Group and the International Monetary Fund. The Belt and Road Initiative is advancing steadily, guided by the principles of extensive consultation, joint contribution and shared benefits.
Belt and Road Initiative in Africa
In Africa, just like in other parts of the world, the Belt and Road Initiative has significantly transformed the continent’s infrastructural landscape with key projects being undertaken, such as the building of gas and oil pipelines, shipping lanes, railways, roads, ports and economic corridors, among others. This is the kind of infrastructure that is needed to spur economic growth and development. The Belt and Road Initiative has been instrumental in supporting industrialization in Africa in line with the UN 2030 Agenda for Sustainable Development, the AU Agenda 2063 and individual African countries’ development plans.
One of the key highlights of the Belt and Road Initiative is its goal of connecting China via rail and shipping links with major markets in the Middle East, Central Asia and Africa, which will open trade in goods and services between nations. Through the Belt and Road Initiative, many African countries have been able to benefit from the Chinese-funded projects which have promoted the growth of the middle class – driving up consumption and domestic demand for goods and services in the economy.
Since the launch of the Belt and Road Initiative five years ago, China has been working with African countries in aligning their development strategies and priorities. In Kenya, this initiative has brought about world-class infrastructure facilities – a key pillar of the Vision 2030 economic development blueprint that aims to transform Kenya into a newly industrialized, middle-income country by the year 2030. The construction of the standard gauge railway in Kenya that connects Nairobi to the tourist city of Mombasa at a cost of $3.8 billion has been instrumental in the movement of people (especially domestic and foreign tourists), goods and services from the port city to other parts of the country and the region. In Ethiopia, locals are benefiting from the construction of the 700-km Addis Ababa-Djibouti railway line built by the Chinese company which has reduced both the cost and duration of transporting people, goods and services between the two countries.
The railway line has also created new opportunities for construction of industrial parks along its corridor, thus boosting production in the leather, textile and agricultural sectors., A landlocked country, Ethiopia depends on the port of Djibouti for more than 90 percent of its imports and exports, and so the new railway line has been instrumental in reducing the delivery time of goods between Addis Ababa and Djibouti, thereby easing the cost of doing business in Ethiopia and attracting foreign direct investment. Some of the other Belt and Road Initiative projects in Africa include the building of the coastal railway line in Nigeria, the Bagamoyo Port in Tanzania, and the Mphanda Nkuwa Dam and Hydroelectric Station in Mozambique. Since 2013, the Belt and Road Initiative has been able to promote trade, foster financial inclusion and facilitate people-to-people exchanges.
Targeted investment
As China commemorates five years of the Belt and Road Initiative’s existence and as we look into the future to evaluate the strengths, weaknesses and opportunities of the Belt and Road Initiative, there is a need for China to further promote an exchange of ideas, transfer of technology and capacity building so that individual countries can take over management of projects sooner rather than later upon completion. It is also recommended that China offers more grants to African countries as a way of mitigating the possible risk of defaulting loan payments due to unsustainable debt levels.
For the Belt and Road Initiative to fly, China also listens to African voices that continue to call for increased investment in sectors that have quicker returns, like manufacturing and services, as opposed to the sole focus on infrastructural projects, which are capital intensive, yet returns will be felt only in the long run. For the next phase of the Belt and Road Initiative to remain transformative, African governments must harness Chinese President Xi’s goodwill demonstrated by the recent pronouncements at the 2018 Beijing Summit of the Forum on China-Africa Cooperation to seek fruitful cooperation that will create jobs, alleviate poverty and promote growth on the continent.
**Comments to [email protected]
**The writer is a Kenyan economist, consultant and a regional commentator on trade and investmentCurrently, the Belt and Road Initiative uptake has grown to include countries with a combined GDP of more than $23 trillion and more than half of the total global population.