An article by: Editorial board

China is pushing Western companies out of African markets. Last year, in various countries of the Black Continent, Chinese companies received the rights to 31% of all large contracts exceeding $50 million.

The recent coup d’état in Niger, one of the world’s largest suppliers of uranium, has drawn attention to the alarming dependence of many Western countries on African raw materials, which are extremely abundant on the Black Continent.

The announced cessation of uranium exports from Niger to France – Europe’s most “nuclear” country, with 56 reactors that generate 63% of all electricity – plunged Paris into a state of greater alarm. According to the OEC (Observatory of Economic Complexity) agency, until recently, Niger “was the main supplier of uranium to France, while imports from Italy and Russia were ten times lower in terms of cost.”

In this situation, the public is asking who controls strategic production and critical infrastructure in Africa. A very clear answer to this more than appropriate question was not long in coming: the Hong Kong newspaper South China Morning Post wrote that over the past 10 years, China has “overtaken” the West in the majority of Africa’s infrastructure projects.

“In 2022, in various African countries, Chinese companies won the rights to 31% of all large contracts exceeding $50 million each,” wrote the South China Morning Post, recalling that “it took less than 10 years for Chinese contractors to force Western companies out of Africa’s infrastructural construction market.”

The Hong Kong newspaper cites the research conducted by Hinrich Foundation, according to which “in the 1990s, 8 out of 10 construction projects were transferred to Western companies under contract.” In the first 10 years of the 21st century, the Western share has gradually decreased to 37% of the total market. Since the launch of China’s global One Belt One Road (Belt and Road) Initiative (also known as the New Silk Road) in 2013, China has quickly taken the lead. In 2022, Western participation has fallen to less than 12% of the total volume of infrastructure projects in Africa.

The ambitious intercontinental Belt and Road project was dictated by economic, as well as geopolitical and military reasons, to connect Asia, Europe, the Middle East, and Africa, where about 40 African states and the African Union as a collective member have currently joined the Chinese initiative. “Infrastructural connectivity,” said President Xi Jinping, “is the foundation of development through cooperation.”

According to Hinrich Foundation lead researcher Keith M. Rockwell, “China has already invested several billion dollars under the Belt and Road Initiative in building railways in Kenya and Ethiopia, as well as seaports in the Republic of Djibouti and Nigeria.”

Beijing’s economic and financial advancement in Africa fits perfectly with political and military projects: in 2017, the first Chinese military base was opened in Djibouti, a country that occupies a strategic position between Eritrea, Ethiopia, and Somalia and has access to the Red Sea and the Gulf of Aden.

In this context, Western countries are distancing themselves from the One Belt One Road initiative. During a summit with President Joe Biden in Washington DC on July 27, Italian Prime Minister Georgia Meloni suggested a hypothesis on “Italy’s imminent withdrawal from the New Silk Road memorandum of understanding with China.” For his part, Biden said the United States would be willing to reward Italy with benefits upon rebuilding the supply chains.

Analysts note that China’s expansion strategy in Africa is based not on foreign direct investment (FDI), but on financing infrastructure projects ($155 billion by 2022) and export advancement activities. In fact, China has overtaken the USA as Africa’s first trading partner: in 2021 (according to the latest available data), trade between Beijing and African countries exceeded $250 billion, while trade between the USA and Africa amounted to only $62 billion.

Enormous Chinese funding has allowed Beijing to increase its influence on the politics of African governments that now prefer Chinese contractors to Western and Russian ones.

The news of Joe Biden’s son Hunter’s role in the deal to sell the Kisanfu and Tenke Fungurum copper-cobalt mines owned by the US company Freeport-McMoRan in the Democratic Republic of Congo to China Molybdenum caused a stir in the United States. “Over the past 20 years, China has been able to assert its dominance over critical minerals in Africa, and the USA has not taken the slightest step to reduce its dependence on Beijing for the supply of strategic metals,” notes the Italian newspaper Il Sole 24 Ore.

Another controversial aspect of Beijing’s expansion in Africa has been associated with the so-called “debt trap.” According to some reports, the inability of African partners to pay their debts prompted the clauses of the contracts offered by Beijing, which “provided for the obligation to transfer state-funded infrastructure under the control of China.”

To avoid criticism and primarily in the face of the financial difficulties of many African countries, China has sharply reduced its lending that has shrunk from $28.4 billion in 2016 to just $1.9 billion in 2020. In 2022, compared to previous years, the issuance of loans under the One Belt One Road initiative decreased by an average of 55% and stopped at $7.5 billion.

The subsoil of the African continent contains gigantic resources of critical minerals, many of which are essential for the energy transition: copper is needed for power lines; cobalt, nickel, lithium, and graphite are necessary to make batteries, and the platinum metals are needed to make “green” hydrogen. Chinese companies control lithium production in Zimbabwe and Namibia, cobalt production in Congo and Zambia. China currently dominates 58% of the global market for lithium recycling, a key metal for electric vehicle batteries.

But China’s initiatives in Africa go far beyond mere mining and extraction of raw materials. Electronics giant Huawei has built a large segment of the continent’s 4G network and is now aiming to do the same with fifth-generation mobile internet.

The West is trying to cope with the Chinese onset. The G7 has launched an initiative to raise and then invest $600 billion in major infrastructure projects in developing countries. Rockwell said he believes “Africa is the main recipient of G7 funding.” At the same time, the European Union launched its own initiative called the Global Gateway, which, in response to the Chinese “One Belt One Road,” will have to guarantee an inflow of investments of 300 billion euros into the economies of developing countries by 2027.

Giornalisti e Redattori di Pluralia

Editorial board