China's Loans to Africa and Recent Chinese Naval Vessels in Nigeria.

Kata Kata

Admin | Posted On : 04-07-2023


In a rare occurrence – and some would say, a show of power and influence - three Chinese military ships arrived in Lagos, Nigeria, on Monday, in what the local officials termed a visit to improve maritime security. 


The ships, led by a destroyer, arrived half a year after the opening of a new billion-dollar deep sea port in Lagos, financed by China, with China holding a majority share in the company that operates the port.  


The arrival of the three Chinese naval vessels is the most vital sign yet that China is aggressively cementing its presence in Africa and control of the continent. This act sends an uncomfortable solid signal to the marrow of the USA and EU. 


China is Nigeria's leading oil importer. 


While China's ambassador in Nigeria Cui Jianchun called the latest visit of the country's ships to Nigeria a breakthrough in China-Nigeria relations, Rear Admiral JD Akpan of the Nigerian Navy reiterated his country's "willingness to work with China to tackle maritime security threats and maintain stability in the Gulf of Guinea."


It is not the first time China has established an overseas naval presence in Africa; in 2017, China built its first overseas naval base in Djibouti, East Africa. 


Nor has the Asian giant hidden its ambition to overtake the USA as the World Superpower. That respectful position comes with exercising power, influence and control. There is no other region where China has demonstrated that quest for power and control than in Africa, and China is leaving no stone unturned in its effort to overthrow the USA and the EU as the new Sheriff in town. To achieve its goal, China has been embarking on many multi-billion dollar projects in Africa and lending billions of dollars to many African countries, often under more liberal conditions than from the USA and EU. As expected, many African countries would rather deal with a lender who hardly sets human rights issues as a prerequisite for the loan than the West, which does just that. 


On the other hand, the USA sees the new naval cooperation between Nigeria and China as a huge strategic threat to its security interest and the African region. 


Are China's loans to African countries an irresistible hook with deadly consequences for the nations? If we agree that there is hardly a Father-Christmas mindset in business – especially international business, then China's sugar-coated loans may become worrisome. That natural business-mindedness explains the scrambling desire for cooperation with Africa, given the continent's substantial natural resources. Yes, cooperation is an euphemism for control. The question is: Are China's loans, and for that matter, the Western financial assistance channelled towards genuinely helping or enslaving Africa and eventually making Africa subordinate to the lenders?


China's loans to Africa have been a considerable discussion and debate subject. China has provided substantial financial assistance to African countries through various channels, including bilateral loans, infrastructure projects, and assistance from state-owned banks.

While these loans have brought some benefits, they have also raised concerns about potential consequences. Here are some key issues to look at while we discuss China's loans to Africa:


1.    Infrastructure development: China's loans have enabled African countries to invest in much-needed infrastructure projects, such as roads, railways, ports, and power plants. These projects have the potential to stimulate economic growth, enhance connectivity, and improve living standards.

2.    Debt burden: One of the main concerns associated with China's loans is the potential for unsustainable debt burdens on African countries. Some critics argue that African countries may struggle to repay these loans, leading to a debt crisis and loss of sovereignty. It is essential for African governments to carefully manage their borrowing and ensure that loans are used effectively and for projects with long-term economic benefits.

3.    Resource-backed loans: China has provided loans to African countries secured by natural resources, such as oil, minerals, or other commodities. While this arrangement can help countries access financing, it also raises concerns about the exploitation of resources and potential environmental and social impacts.

4.    Lack of transparency: There have been criticisms about the lack of transparency surrounding China's loans to Africa. Some argue that the terms and conditions of these loans are only sometimes clear, making it challenging to assess the full implications and potential risks for recipient countries. Improved transparency and accountability are necessary to ensure that loans are used responsibly and benefit African populations.

5.    Economic dependency: China's extensive investments in Africa have led to questions about economic dependency. Some argue that African countries may become overly reliant on China, both economically and politically, which could undermine their sovereignty and long-term development plans. Diversifying partnerships and investments is crucial for African countries to mitigate these risks.

6.    Social and environmental impacts: Large infrastructure projects funded by Chinese loans have faced criticism for their social and environmental impacts. Concerns have been raised about the displacement of local communities, labour practices, environmental degradation, and lack of adherence to social and environmental standards. African governments and China must address these concerns and ensure that projects are implemented sustainably and in consultation with local communities.

7.    Geopolitical implications: China's loans to Africa are also part of its broader geopolitical strategy. Some argue that China uses its financial assistance to gain political influence and access to Africa's natural resources. The access has raised concerns among other global powers about China's growing regional influence.

8.    Depopulation of China: China is the most populous country in the world, with over 1.4 billion people as of September 2021. Many have argued that it is in the interest of the government in Beijing to reduce its population to a manageable level. Migration to other parts of the world is one of the ways to achieve that. In most cases, whenever China gives a loan to other countries, it uses its Chinese workforce to execute the project. By so doing, Beijing creates jobs for its citizen at the expense of the local population who desperately needs the jobs. In most cases, those Chinese workers settle in Africa after the completion of the project. 


It is worth noting that the impact and consequences of China's loans to Africa are complex and vary across countries and projects. While there are potential risks and challenges associated with these loans, they also offer opportunities for African countries to address infrastructure gaps and promote economic development. It is essential for African governments to carefully evaluate loan terms, prioritize sustainable development, and ensure they manage the loans effectively to maximize their benefits and minimize potential negative consequences. 


Suppose African countries take all these measures into account before borrowing from China. Otherwise, there might come to a point where African countries need help paying the loans; such a situation would give China an excuse to control the government's vital and strategic organs or departments. The control might translate to a loss of sovereignty. 


The effects of China's loan might start painlessly, leading to unbearable gnashing of the teeth for African countries. When such occurs, we have a situation where those African countries might jump from frying pan to fire – economically, politically and strategically. There is a good reason for Africans to think deeply before taking China's loans. 



 Photo: Financial Times.