ACFTA: China’s $160 bn package to fund African industrialization
Sopuruchi Onwuka
New race for African governments in the ongoing Chinese loan disbursements would be to advance industrial propositions that would enable flow of local goods and services in the toll free African Continental Free Trade Area (ACFTA), shifting the focus of the prevailing disbursements from infrastructural development.
The modalities for the new loan deals with China would form part of the concluding sessions and sideline meeting with Chinese officials at the ongoing economic summit of the group of five developing nations or BRICS hosted by South Africa.
The Oracle Today reports that China hosts periodic meetings with African heads of state for the purpose of opening trade ties aimed at funding infrastructural development in the continent while opening opportunities for Chinese companies that actually benefit from the contract.
In the last meeting in Beijing, China disbursed over $20 billion in loans and grants under a $160 billion staggered package to African countries to drive infrastructural development. The loans are disbursed mainly by China’s government controlled banks.
China which has one of the largest foreign reserves on the planet also runs the wider Belt and Road Initiative founded in 2013 to assist developing countries around the world finance infrastructural development projects.
Director-General of China’s Department of African Affairs, Wu Peng, disclosed in Cape Town that the country’s stream of loans to African countries would now have a new strategic direction based on the emerging competition activated by the AFCFTA.
He said that Chinese investments in Africa would continue to grow in the coming years with more small and medium-sized companies flowing into the continent. Peng vowed that the China’s commitment to Africa would remain strong irrespective of turns in the global and Chinese economies.
He stated that China was following requests by African countries to shift from offering infrastructural loans to funding local industrialization. Peng added that African integration is laying new set if development agenda for the Chinese lending scheme.
Already a special roundtable has been scheduled for meetings on financial aids from China as leaders and diplomats from BRICS countries and African government delegates round off the conference in South Africa today.
The Oracle Today reports that BRICS is a union of five developing global economic powerhouses comprising Brazil, Russia, India, China and South Africa. The bloc counterpoises the longstanding Organization for Economic Cooperation and Development (OECD) housing world’s most developed and economically advanced countries like United States, France, Canada, Britain, Australia and all members of the current European Union.
Mr Peng said regular meeting between Chinese and African ministers due to take place next year, adding however that urgent bilateral and lending issues could be addressed ahead of the next scheduled meeting.
