China is helping build Africa’s cities, but its approach sidelines local urban planners and residents
theconversation.com
Chinese-funded infrastructure projects in African cities are driven by the national elites and therefore do not necessarily lead to community-level improvements.

cross-posted from: https://mander.xyz/post/50419002

…

[A] recent analysis of 267 Chinese‑financed projects in Addis Ababa (Ethiopia), Kinshasa (Democratic Republic of Congo), Lagos (Nigeria), Luanda (Angola), Lusaka (Zambia) and Nairobi (Kenya) shows that while China delivers an impressive volume of infrastructure, it risks reinforcing Africa’s national government dominance in decision-making on urban infrastructure development.

…

Cities – their governments and residents – are excluded from the project planning and negotiation process.

…

The agreements were mostly negotiated and funded through national ministries or state agencies. This happens partly because many cities are legally restricted from taking on external debt, and partly because lenders prefer working with sovereign governments.

…

If African cities are to manage the rapid urbanisation and meet the needs of the roughly 1.5 billion people expected to live in urban areas by mid-century, they need more than new bridges and roads.

They need the fiscal power and planning capacity to plan, finance and govern infrastructure on their own terms.

…

These steps would be useful:

  • rethink how urban infrastructure is discussed

  • strengthen municipal revenue and financial capacity

  • improve planning coordination across governments.

…

The challenge for African cities is not simply attracting more finance but gaining the authority and capacity to guide urban development. China will likely remain an important financier. But no external partner can substitute for strong city institutions, transparent financial systems, and coordinated planning.

…

Web Archive link

  • GardenGeekEnglish
    71·
    15 hours ago

    This is the Chinese version of a colonial world order. Build infrastructure payed for by China using chinese workers and companies. In this way, a country generates contracts for its own industry and can channel foreign exchange reserves into its own economic growth, while simultaneously gaining geopolitical influence through the debt incurred by the recipient country. If the country in question cannot repay its debts (which is often the case, as is predictable), China takes ownership or leases the infrastructure that has been built and thus has a double leverage (logistical infrastructure and debt) against the recipient country—in itself a clever strategy.

    Ultimately, it is a less violent form of colonialism than the military colonialism of the Europeans… yet it deliberately places developing countries in a dependency that is disadvantageous to them.

    • Sepia@mander.xyzOPEnglish
      4·
      14 hours ago

      Well said.

      If interested, there is a strong body of research in the meantime how the Chinese Communist Party is spreading its regime to the Global South.

      One investigation reveals that borrowing from Beijing is not cheap: whereas a typical rescue loan from the International Monetary Fund (IMF) carries a 2% interest rate, the average interest rate attached to a Chinese rescue loan is 5%.

      In addition, as another study says, Chinese loans come with opaque terms and many clauses that put the borrower at a disadvantage:

      We find widespread use of “No Paris Club” and “no comparability of treatment” clauses—that expressly prohibit the borrower country from restructuring their outstanding debts to China in coordination with Paris Club creditors and/or on comparable terms with them. This practice suggests that Chinese state-owned banks are effectively seeking to position themselves as “preferred creditors” exempt from restructuring. More generally, we find that Chinese contracts give lenders considerable discretion to cancel loans and/or demand full repayment ahead of schedule. Such terms give lenders an opening to project policy influence over the sovereign borrower, and effectively limit the borrower’s policy space to cancel a Chinese loan or to issue new environmental regulations. [Emphasis mine.]

      A new report reveals many of these hidden structures of Chinese loans in global lending:

      In a typical transaction, debtors promise to route their principal commodity export revenues through overseas bank accounts that remain out of public sight and largely beyond their control until the debts are repaid. The cash balances in these accounts, mostly located in China and controlled by the lenders, can be very large; in low-income, commodity-exporting countries, they average more than 20% of annual public debt service to all external creditors.

      @randomname@lemmy.org