Paid subscribers can listen to an audio version of this newsletter here
Last week I saw videos on Instagram of people riding the newly completed second line of Nigeria’s mass transit system, five months after it officially opened the first line and over a decade after it began construction.
I didn’t know anything about the line’s construction until I saw the posts, but one look at the sleek, all-white interiors and spacious carriages that looked like every metro line from Hong Kong to Beijing, and I knew they had to be made in China.
An influencer poses on the newly opened Lagos metro line
The governor of Lagos State said that the new transport system was a “‘monumental leap’ for the city”, and a step towards “redefining urban transformation across Africa.” But unfortunately, not every project completed by Chinese companies in Africa is met with such resounding praise.
Take the light-rail system in Addis Ababa, Ethiopia's capital city, which was opened in 2015 to much excitement, and is now suffering from serious neglect. Not only is the service bad, forcing many to turn back to traditional, inefficient transport to get to work, but the government is still paying back the initial loan it took out to build the system, most of which was borrowed from Chinese banks.
Bloomberg has used the crumbling of Addis Ababa’s metro system as evidence of China’s poor planning and neglect of construction projects once they’re done.
“Envisioned as a project that would redefine urban transport, the system promised to sweep up to 60,000 passengers per hour along its tracks. Today it sits as a daily reminder of the broken promises of China-funded infrastructure investments that swept Africa in recent years. Frequent breakdowns, inadequate maintenance funding and operational constraints mean barely one-third of its 41 trains are operational, ferrying 55,000 passengers a day, a fraction of initial projections.
The project may have prioritized short-term political goals over long-term operational sustainability, says Frangton Chiyemura, a lecturer in Global Development at the UK Open University… He cited a standard-gauge, China-backed railway in Nigeria as an analogue to the Ethiopian metro, saddling the government with infrastructure and its associated maintenance costs.”
China’s true intentions in Africa have always been under intense scrutiny by Western nations, who have accused China of loaning huge sums to developing nations either to force them into unequal political alliances, create pseudo-colonies in which China can set up military bases, or simply profit off the interest. Now that China is apparently pulling back from big infrastructure projects, the question has essentially flipped to something like “Was China’s investment in Africa just a failed get rich quick scheme?”
China, however, has always argued that Western nations simply have no ability to view any relationship between two nations through anything but an imperialist lens. The goal is long-term, win-win cooperation, not a series of quick wins and land grabs that will merely enrich them and no one else. African countries usually seem grateful for the investment, regardless of their political implications or future financial burden. China certainly has never called on an African president to vote with them in a UN referendum in exchange for building a light rail system, but then it’s still early days.
But something that Western analysts have correctly hit on is that China’s investment in Africa is changing in very significant ways. Does this mean China is less interested in pursuing its interests in Africa? Or is it simply that these interests are shifting?
Signs China is backing out
One of the biggest signs analysts have highlighted to show China moving away from Africa is the evident decline in the number of Chinese workers on the continent. Just a decade ago you couldn’t go a week without news of a new mega-project being launched between China and another African country: ports, railways, stadiums, schools, hospitals, factories, even a business district or two. Though these projects were framed as collaborations, more often than not they involved hundreds and thousands of Chinese engineers, managers, and construction workers moving over and handling the projects largely by themselves while the receiving country footed the bill.
But recently, the number of Chinese workers in Africa has significantly decreased, dropping from a peak of 263,696 in 2015 to 88,371 in 2022. Factors contributing to this decline include the impact of the pandemic, fluctuations in oil prices, and the scaling down of China's Belt and Road Initiative (BRI). While some projects have resumed, the overall trend suggests a sustained decrease in Chinese worker presence on the continent. Countries heavily reliant on oil exports, such as Algeria and Angola, have seen the largest drops in Chinese worker numbers due to the decline in oil prices.
One reason for a decrease in workers could be the decline in numbers and profits Chinese companies are pulling in from construction projects in Africa. While a decade ago Chinese companies earned more than a third of their total overseas revenue from Africa, Chinese revenue earned from engineering and construction works in Africa has fallen by more than 30% since 2015. With many countries struggling to pay back loans and bad press increasing over debt-trapping, Chinese banks have become more conservative in their lending policies, meaning that fewer projects are being started.
It may also be that African nations are growing weary of Chinese over-involvement in their basic infrastructure. Apart from being thrown into debt, these projects often do not come with the increase in jobs or skills training promised.
“Usually at the beginning of projects there is a higher proportion of Chinese engineers and skilled labor, but over time this tends to shift, as more local laborers are hired...
Even as China sends fewer of its own people to Africa, hiring Africans for higher-paid, skilled jobs by Chinese companies may not happen immediately”
China's ongoing tensions with Western powers and diplomatic challenges in regions like South Asia may also contribute to diverting attention and resources away from Africa. As China spends more time defending interests in the South China sea, supporting allies like Russia, or seeking new opportunities in the Middle East, its level of engagement with Africa could be affected. Generally speaking, African countries have less financial and political currency (not including their vast mineral and resource wealth) which means that very few African nations are invited to the table when it comes to geopolitical decision-making. As the stakes get higher, China may have no choice but to put its grander plans for Africa on hold.
Signs China is leaning in
However, while macro-level indicators raise red flags over China’s level of commitment to Africa, they belie some of the more focused, interesting, and potentially profitable projects China seems to be putting its efforts into. When looking at some of these smaller scale projects, it seems less the case that Africa has nothing left to offer at all, but rather that some places have more to offer than others, whether that be specific countries or newer industries.
For example, China is focusing more on the diplomatic aspects of its relationship with African nations that may pay off in the long run, rather than just relying on semi-independent contractors to build good faith through BRI projects. During Angolan President Joao Lourenco’s recent visit to Beijing, Xi Jinping stressed that the two countries were both developing, and the two had the opportunity to grow together, with China being able to help Angola “modernise agriculture, industrialise and diversify its economy.”
The port calls of the PLA around the coast of Africa that seem to worry western leaders provide more than drilling opportunities for the Chinese navy. They also serve as anti-piracy patrols, military exercises and drills with African forces, allowing for citizen evacuations, delivery of humanitarian aid, and military diplomacy. They provide opportunities for China to market its military hardware and strengthen security relationships with African governments. Additionally, they allow African countries to demonstrate strategic ties with China and gain exposure to foreign military practices, while potentially negotiating economic agreements in exchange for permitting Chinese naval presence.
In a similar vein, China may also be abandoning its scatter-gun approach to infrastructure and engineering projects to focus instead on those that would reap the most reward. Again, Angola is one of the five resource-rich countries that accounted for 41% of all Chinese companies’ 2022 gross annual revenues from construction projects in Africa, alongside Nigeria, Algeria, Egypt and the Democratic Republic of the Congo. Projects in Nigeria – one of which we mentioned at the head of this newsletter – provide Chinese companies with an annual revenue of around $4.59 billion, and have done since 2012.
It’s also clear that China is becoming less interested in physical infrastructure, and more investing in what could be seen as the industries of the future, including mineral resources, renewable energy and AI-integrated cities. And this doesn’t mean that China has given up on its traditional mega-project strategy just yet, as evidenced by the two new major stadiums soon to be built in Tanzania and Kenya. All these long-term investments may pay off big, if China can secure its supply of iron ore from the continent as planned, allowing it to ‘de-risk’ from less friendly suppliers such as Australia.
Changing perspectives
Realistically, what is happening with China’s involvement in Africa represents more of a change in priorities and patterns of investment rather than a total withdrawal from the continent.
While I’m sure there are many Western pundits that would love nothing more than to herald the failure of China’s “go out” policy, in reality their initial strategy of trying anything and everything has allowed them to refine their approach. Having learnt over the past decade where their money is best spent, where the growth opportunities are, and who they can trust, the Chinese government seems to almost be taking over from its state-owned corporations in leading the way to closer ties with specific African countries.
Even where it seems that China may have moved on, it may just be that people are pointing out ongoing problems that can and may be addressed, rather than complete failures. Going back to the Addis Ababa metro, many of the problems the system is suffering from are not actually China’s fault, and are not beyond China’s means to help fix. They have already pledged spare parts for repairs, and could send specialists to train qualified workmen to help with maintenance in the future. China is already heavily involved in renewable energy projects across the continent, one of which is ironically in Ethiopia, and could also help to solve the power shortage problem.
It may not all work out in the end. If African countries start defaulting on their loans en masse, or China does start calling on leaders to back them up in tense geopolitical situations, things could get messy. But as long as China remains the ally the West refuses to be, there is no reason for Africa to abandon their ‘win-win cooperation’ with China, and vice versa.