China to indebt Africa with another USD 60 billion kitty

By Appolinaire Nishirimbere

China unveils a new $60 billion kitty for Africa as FOCAC kicks off. Pan African tax justice activists demand a study on Chinese contribution to illicit financial flows from Africa and African leaders’ accountability.

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“BEIJING 3rd SEPTEMBER 2018, (PSCU) — The 2018 summit of the Forum on China-Africa Cooperation kicked off today with China unveiling a new $60 billion kitty for Africa’s development as part of a raft of new measures to strengthen Sino-Africa ties” , can we read on a facebook post by Uhuru Kenyatta, president of Kenya.

This happens amids the campaigns for tax justice across the African continent. One of them being the Stop The Bleeding campaign that seeks to curb the illicit financial flows from Africa.

According to the report by the High Level Panel that was chaired by the former president of South Africa Tambo Mbeki as released in 2015 ,Africa loses $50 billion approximately in illicit financial flows which makes her the “net creditor” of the rest of the world. One can wonder what would be the added value of the Chinese aid in Africa when we know that Africa loses more than she receives in aid and debt according to the same report quoted above.

Economic analysts think that China has come in to conquer the market already dominated by two great traditional financial institutions vz. The World Bank and International  Monetary Fund-IMF that have been giving conditional aids  and debts to the continent since the independences. Although the only difference between the Chinese economic cooperation and western one is the conditions with the former. Therefore , tax justice activists think that this sino-african cooperation will rather amplify corruption and Africa will continue losing its ressources to the profit of the wealthy.

This is clearly seen in the statement by Chinese President where he uses a Chinese proverb, “the ocean is vast because it rejects no river” which could insinuate that even corruption and misgovernance can be tolerate in a Chinese cooperation.

“China and Africa can forge a stronger comprehensive and strategic partnership. China promises to engage with Africa on a principle of sincerity and real results,” said President Xi Jinping.

“China’s 1.3 billion people and Africa’s 1.2 billion want a shared future,” said the Chinese leader as he promised that no obstacle will be allowed to hold back the ‘joint march’.

FOCAC, which was started 18 years ago, aims to build a closer China-Africa community with a shared future. But what has Africa gained in the past 18 years other than the outflowing of her financial and natural  resources to China ?

China-Africa trade volume mostly dominated by Chinese exports to Africa and the ores (raw)  imported from the latter amounted to 170 billion U.S. dollars in 2017, up from just over 10 billion dollars in 2000, according to data from China’s Ministry of Commerce.

The Sixth Conference of Chinese and African Enterpreneurs officially opened by President Xi Jinping was attended by Presidents’ Uhuru Kenyatta (Kenya), Cyril Ramaphosa (South Africa), Idris Deby(Chad), Omar Guelleh (Djibouti), Mohamed Abdel Aziz (Mauritania), Muhamadu Buhari (Nigeria) and Paul Kagame (Rwanda) among others with president Cyril Ramaphosa stating that the sino-chinese commercial cooperation is not “neocolonialism ” as many Pan African activists would  depict it following President Xi’s statement recalling his recent visit to Africa during which he “witnessed first hand the successes of Chinese supported initiatives on the continent as he traveled to South Africa to attend the Brics Summit”

The Chinese leader said that China will continue strengthening its engagement with Africa as it continues to pursue a win-win partnerships with the continent. By is it really a win-win partnership?

For example , the Kenya’s Standard Gauge Railway (SGR) line from Mombasa to Nairobi is presented as one of the key success stories from the China-Africa partnership, as President Xi said that China had invested a sum of $170 billion in the last 3 years but everyone knows the corruption surrounding these investments ,the recent  vivid example being the said investment in the Gauge Railway line from Mombasa to Nairobi.

“China is key for us both as a market for Kenyan products and as a source of investments. We are therefore keen on growing trade by removing barriers and by so doing, attract more Chinese investors to Kenya especially for Big 4 leaning projects in manufacturing,” Ms. Kariuki said. Hence , we hope that Kenya isn’t going to offer tax holidays to Chinese investors to further ease the outflowing of Kenyan financial resources .

The EATGN ( East Africa Tax and Governance Network) , on the sidelines of the  5th International Tax Justice Academy in Kenya, in its strategic planning ,recommended that a study be conducted to measure how much Africa would be losing or gaining in this Sino-China economic partnerships.

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