African unsustainable development between EU grants and China loans

Brussels – Railways, ports, roads. The infrastructures built by China in Africa are impressive and already making immediate impact and long term changes in many African countries. Look at the Bagamoyo Port in Tanzania, for instance, the $11 billion infrastructure funded by China through loans will become the largest port of the continent with 20 million exchange containers per year. With The Chinese government construction firm CMHI expects to complete the port by 2045. It will be the largest port in East Africa with operations starting in 2020. Along with the port, 190 industries are being built in the Bagamoyo area creating a Special Economic Zone with 700 industries. But this huge infrastructure will not be owned by Tanzania.



China Merchants Holdings International (CMHI), will run Bagamoyo port as one of its overseas ports. Tanzanian government managed to raise only US $1.5 million of the 11 billion giant shipping infrastructure. Such operations are being defined as new colonialism by which China is empowering its trade control and influence in the continent by generating debt and dependency in the countries it operates in.

On the other side, the partnerships and grants based development policy of the EU in Africa delivers countless projects in many fields and countries such Agrifi in Kenya, CIFOR in Democratic Republic of Congo SAGCOT and Youth Economic Empowerment – YEE in Tanzani, the recent €138 million humanitarian and development fund for the Lake Chad region plus many infrastructure operations (building or restructuring of roads and railways in many regions, educational programmes, women protection funds) all aimed at impacting societies directly and determine the change from within to develop autonomy and long term sustainable development.

The problem is that this last set of policies, though isn’t creating new debts in such countries, is not creating the huge impact African countries need for the formation of the working class and industries needed to enter market and global trade within the coming years.

Now, it is purely speculative to evaluate the extent to which the EU might not be interested in contributing to a strong, competitive Africa entering global trade in the short time and the extent to which China is intentionally growing African countries’ debt in order to control trade in the continent.

De facto, countries in which China led infrastructures have been realised or are in due course are enacting development dynamics by which the majority of workers are locals who before this foreign investments were unemployed with no perspectives but poverty.

A second issue arises when we talk about funds delivery in Africa: the endemic corruption of governments leading to the dispersion of funds. That’s why for instance EU grants have been effective as the grant process is more controllable in all stages.

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The high impact infrastructure development led by China in many African countries raise the question of sustainability in terms of consequent debt and dependency on China due to the fact many times African countries can’t even own or run such huge infrastructures. To date Tanzania owes China more than $2 billion for example.

On the other hand EU aid, educational projects, infrastructures aimed at impacting and delivering change within societies, are not creating a fast economic development and industrialisation which determine the structural change in African countries; that is not only because the amount of billion invested (and available) is much lower, but also because, though the EU is the main customer for African exports (as countries in most cases have free access to the EU market thanks to the Economic Partnership Agreements, EPAs), its foreign trade policy looks more oriented to a balance of powers more than a shift to new ones.

Justine de Braeme