What Sacked Tillerson Missed about Chinese Loans
The sacked American Secretary of State, Rex Tillerson has just concluded a tour of African countries during which the focus seems to be advocacy against patronage of China by Africa. From Ethiopia to Abuja, the top diplomat was hammering the message-beware of Chinese loans.
His words: “I think it is important to clarify that we do not seek to stop Chinese investments from flowing to countries that need those investments, said Mr. Rex Tillerson, said on Monday in Abuja.
“But what we are cautioning countries is to look carefully, that the implications of the level of debts, the terms of the debts, and whether the arrangements around the local financing are intact creating jobs, local capacity or the projects being carried out by foreign labour being brought to your country. Is the structure of the financing such that you will always be in control of your infrastructure?
“Are there mechanism to deal with the faults so that you do not lose ownership of your own assets? These are national assets whether there are ports, railways, or major highways.
“We have seen this occurred in other countries that were not so careful and has result they got themselves in situation where they awfully lost control of their infrastructure, lost the ownership of it.
“And that is the precaution that we talking about. That there are international rules and norms and financial structure to deal with unforeseen circumstances and I think we are just cautioning countries to look carefully.
“There are other alternatives financing mechanism that are available and I think in particular, of government create the right conditions around those infrastructures investments, there are also great potentials for public-private sector co-investing in the infrastructure. And we are developing mechanism that will also create alternative opportunities financing offer”,Tillerson said.
But something was missing. Either the State department does not have full grasp of what the Chinese are doing or the entire advocacy was a mere joke. Why are African countries jumping after Beijing for loans? Why is it that almost all African countries are neck deep in partnership with the Chinese? If these are not addressed, there is no way the US can get to the root of the matter.
Most African government turned East because of challenges with western financing. Loans from Breton Woods’s institutions came with austerity measures that strangulated many countries. The loan conditionality from Western institutions mostly subjugated African countries. Aside that such loans were insufficient to meet developmental needs of Africans, they were also mostly prescribed with much of the loans going for consultancy among others.
The conditionality such as withdrawal of subsidies among others has led to unrest in many countries. Untold hardship were inflicted on Africans even when such loan had little or no impact on the developmental lives of the citizens. That was the state when the Beijing alternative opened up to African leaders.
Many Africans were aware of likely shortcomings in the Chinese loans but most leaders judged them to be better suited to African developmental needs. New stadium, ports, roads and pipelines were erected with such loans. A fast train line between Ethiopia and Djibouti was completed in records time with Chinese assistance. Currently, a train line is under construction that will straddle Africa from Gambia to East Africa. Wonderful developmental projects which former colonial masters never attempted.
Advocacy against the Chinese cannot work in Africa unless the West reform her ways of dealing with Africa. Africans wants support and assistance but they do not want to lose their freedom and independence. They don’t want to implement conditionalites which no western government can attempt in their own countries.
The West will do better than current advocacy to wean Africans away from the Chinese.