US-Africa summit: Why China controls African economies

China has taken firm control of African economies in a rather menacing manner that is disgusting to the United States of America (USA). The U.S., the world’s largest economy, is deeply troubled by China’s Greek gift to Africa’s corrupt leaders.

China is everywhere in Africa. Even South Africa, the most industrialised economy on the Dark Continent, has sheepishly swallowed China’s Greek gift hook, line and sinker.

In Nigeria, there is practically no company from the U.S. or European Union (EU) in the construction industry. Even the U.S. and EU’s absolute control of the oil industry is gradually receding as China scrambles for a foothold in the industry.

China’s intimidating control of African economies is clearly discernible in its volume of trade with the continent. In 2021, China’s exports to Africa amounted to $254 billion. The U.S. only managed to slip in goods worth $60 billion during the period.

America’s waning influence in Africa emanates largely from its strict adherence to business morality. American and European construction companies left most of the countries in Africa because of the strict enforcement of anti-corruption rules in their home base.

African rulers are so corrupt that they take their cuts in every contract they award. Bidders who refuse to oblige are usually blacklisted. That was the major problem that led to the exit of American and EU construction firms in Nigeria.

A director of the American company that bribed Nigerian rulers for the award of the contract for the construction of Nigeria Liquefied Natural Gas (NLNG) project was prosecuted, convicted and sent to jail for the crime.

Nigerian rulers who collected the bribes and were openly named by the bribe givers are still parading themselves as role models in Africa’s largest economy. Nothing has happened to them. The bribe givers paid a huge price but the takers enjoyed the proceeds of the crime with impunity.

American and EU construction firms responded to the strict enforcement of anti-corruption laws at home by withdrawing from Nigeria and other parts of the continent. Chinese firms moved in to fill the vacuum created by the exit of the law-abiding western firms.

Corruption attracts the death penalty in China. However, China is very lenient with the enforcement of anti-corruption rules in the transaction of business off its shores. Anything goes when it comes to securing business abroad. The Chinese government does not prosecute anyone for bribing foreign officials to award them contracts.

The situation is just what Nigerian and most of the government officials in other African countries want. They exaggerate the cost of the so-called infrastructure aid projects executed by Chinese firms and share the cuts with their colleagues. Unlike their counterparts in the U.S. and EU countries, Chinese officials are convinced that they will never be prosecuted at home for bribing African government officials to award them contracts.

Besides, corrupt Nigerian importers give Chinese manufacturers the specification for the production of fake goods that are sold only in Nigerian markets at huge profits. No one tries that with German or U.S. manufacturers. Operators of the offending firm would rot in jail.

China has notched up corruption in Africa by several rungs. That is a huge disincentive for U.S. and EU construction firms. That explains their absence in the continent and the ease with which Chinese firms have replaced them.

Another factor responsible for China’s domineering influence in Africa is the use of Chinese government companies to execute infrastructure projects in Africa.

Conversely, the U.S. relies extensively on private companies for its foothold in Africa. The difference between the two approaches to the so-called aids projects is that the private companies relied upon by the U.S. are profit-oriented and would not take the risk taken by Chinese public companies which are backed fully by government.

Architects of U.S. strategy on re-entering Africa must consider how to empower U.S. aid agencies to perform some of the functions handled by Chinese government companies. The option is to let private companies handle the projects while the U.S. government underwrites the risks involved.

Last week the U.S. government responded rather belatedly to China’s unchallenged, near-total control of African economies. It summoned 49 African heads of state to an event tagged U.S.-Africa Summit. The summit is to explore ways of involving the U.S. government in infrastructure development projects in Africa.

African governments rose from the summit with a measure of assurance from the U.S. government to assist in certain developments. U.S. president Joe Biden promised to invest $55 billion in African economies in the next three years.

The truth is that China is actually not playing Father Christmas or Red Cross in Africa. The infrastructure projects executed by Chinese public firms are not aid projects.

They are funded by the respective African countries through soft loans with explicit repayment terms and deadlines. In fact, African governments have mortgaged their economies to China with the projects.

They all risk forceful take-over by Chinese government in the event of loans default. They are dangerously mortgaging of sovereignty which no one would enter into if not for the corrupt gains obtained by the government officials awarding the contracts.

When an African government defaults in loans repayment, China confiscates the project funded with the loan.

The Chinese have taken over the continent through their Greek gifts which have consequently notched up corruption in the respective countries.

The so-called aid projects have been clandestinely converted into job creation facilities to reduce unemployment among China’s 1.4 billion people. There are 100, 000 Chinese citizens in Nigeria alone.

Unskilled labourers are smuggled in as engineers to handle different aspects of the infrastructure projects which could provide jobs for Nigerians. The Americans were not as exploitative.

President Muhammadu Buhari came out of the U.S.-Africa summit with a commitment by the U.S. government to assist Nigeria in its $60 billion energy transition project that would reduce carbon emission by 2060.

That could bring back the Americans and reinvigorate the faltering war against corruption which the Chinese have practically killed.

UNI Agric Markurdi
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