There is a lot on the agenda for the upcoming 2018 Forum on China-Africa Cooperation (FOCAC) summit that will convene in Beijing on September 3. Leaders from 50 African states will be in town to discuss everything from enhanced Sino-African military ties, health agreements and academic exchanges. But one issue will dominate more than any other: infrastructure.
China is expected to unveil another massive financing package for African states to build out new roads, airports, railways and other badly-needed infrastructure. Kenya’s president Joseph Kenyatta is a prime example as he plans to sign a new Sh380 billion loan package for the next phase of the Standard Gauge Railway.
While no one questions Kenya’s, and Africa as a whole, need for infrastructure, there are legitimate concerns as to whether it makes sense to borrow so much from China to pay for it.
Andrew Alli, for his part, welcomes the Chinese to finance and build African infrastructure. Andrew is the former CEO of the Africa Finance Corporation, a public-private development finance institution where he oversaw $4.5 billion of investments across 30 African countries.
“Struggling infrastructure projects like this have intensified a rising debt problem for large and small African economies alike. Now it is hoped investment from China will generate the necessary jobs and revenues for countries to avoid infrastructure-induced debt crises.” — Luke Patey, senior researcher at the Danish Institute for International Studies
“Chinese infrastructure investment is no panacea and needs (like any other major project), to be managed very carefully, something that African governments and project sponsors have often proved incapable of doing well,” he said in a recent column on the financial news website Quartz Africa. “But such investment is a useful addition to the slate of options available to Africans and should be welcomed as such.”
Andrew joins Eric & Cobus to discuss what African leaders attending the FOCAC summit should think about when negotiating these big financing packages for infrastructure development.
- Quartz Africa: How to separate the myths and realities of China’s role in tackling Africa’s infrastructure deficit by Andrew Alli
- Xinhua: 2018 FOCAC Beijing Summit: What to expect by Lu Hui
- The Financial Times: The Chinese Model is Failing Africa by Luke Patey
Andrew Alli has been investing in Africa for the past twenty years, most recently while he was CEO of Africa Finance Corporation where he was responsible for over $4 billion of investments made in 30 countries. He has worked with some of Africa’s leading businesses and entrepreneurs and on some of the continent’s most interesting projects. Andrew shares insights on business, investing and leadership. Follow on Twitter @afalli and medium.com/@afalli
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