Africa 'in Bed' With China is Good Deal - Prof. Ken Ife

[Music] [Applause] let's go to China's Story the biggest the Chinese president Zin pin will open the ninth Forum on China Africa cooperation Summit formally on Thursday in Beijing the Chinese president is expected to urge African leaders in attendance to take on more Chinese Goods in exchange for pledges of loans and Investments the three yearly Forum oks officially kick off today with a welcome dinner for the 50 African nations in attendance and will close on Friday after negotiations over cooperation documents setting the curse of China Africa relations up until the year 2027 China is ramping up its influence in Africa looking to upstage the continent's traditional Partners mainly Europe the United States and others welcome my guest to discuss all of these and more Professor Ken EI a development Economist and a public policy analyst is standing by Inu Studios great to see you again on the show tonight Professor welcome oh thank you for having me a great evening to you yes a dinner has been held tonight in Beijing to welcome 50 African leaders are you encouraged at this large garden of African heads of state in Beijing L secure both public and private investment from China how do you respond always always always a pleasure always a ray of hope when you have our our heads of States Gather in China because they go there for one clear purpose they want to attract investment and obviously very large investment to be honest and which is what distinguishes China from other other contenders China can do 10 20 billion dollars without without sweat or anything and no governance conditions and all that kind of but they have all their their weaknesses as well but that's mainly The Big Show for them so they also try to to get investment but also have trade on the back of that investment so the investment is to go to infrastructure and then on Progressive value addition uh industrialization based on value addition of our natural and and mineral products so that's the key agenda for African leaders and they're all on the same page but I think you're are going to find that this particular one wants to deepen that relationship so why is China Professor pushing its Frontiers across Africa even more aggressively it's done about $30 billion or more already in various Landing Windows that's as far back as 2019 and but things looks to be decelerated but before we get to that why is CH China interested more in Africa right now than ever before well you know Africa is the is the most beautiful bride and and is the last continent in terms of development because we we have more room for development we're only about we're only punching at about 15% int regional trade compared to Europe that's over 70% and the Asians about 60 American so they we're Far Far Below and then we are also a huge market for infrastructure uh especially on interconnectivity um and and then we have so much more investment to make in in human resource development in health in education and then also on industrialization because we are the worst of the whole continent in terms of indust ization bear in mind that in 20 in 1945 and thereabout Africa was consigned to producer of raw materials and then predominantly going to Europe for processing and then we have to fold our hands and wait for them to process them and bring it for us to consume so that has hampered industrialization um by Design and then of course infrastructure is quite necessary for you to industrialized so all of them are music to the ears of China so China has capitalized on that opportunity and thinks positively of what Africa needs they also have their Road and build project which is also a global phenomenon and they want our buying into that old Continental framework and then also they also now also pushing other ones like Global development initiative Global Security initiatives Global civilization initiatives and they want our buying into those so China has something agenda for this and then Africa just a meeting of mind but again there is a backdrop of of cold war changing to something else and now bipolar after moving to tripolar multipolar people the the the world is less safe as it were and everybody's looking for for partnership that can be sustained over over a a much more difficult period we are facing right now so when we look at Africa's development process had really been dependent on Chinese loans and investment even when you look at a number of local African currencies you find images and going to show a couple of them which one of my colleagues vmai was very uh uh very uh very nice to to share with us look so you can see Africa's China's Footprints across Africa whether you're talking about Road Dam whatever current whatever we're doing from Egypt to Zambia to Angola wherever you look in Africa there's always something that ch China has built on the continent and it's all showing on our currencies across the continent as you can see uh on the screen so so does this mean there for that when you talk about Africa is more more of Chinese than otherwise is that so but that is by Design because China wants to make it you know have a foot a solid footprint on on our on on our countries and and that's where they have they're going about it that they pick projects they do them and then they don't get involved in the politics of I mean you know the politics they are so many politics around when you are looking around the rest of the globe for for major support or loan or or you know whatever all these governance conditions makes it so difficult and then you see issues around dead trap you have there so many issues but China tries to you know walk a path that a much more sustainable path and have a blueprint and have a good PR for example those seven African countries where they have done um you know friendship currency somewh in notes some are in coins but most of them seven of them they're all in notes and in particular Guinea and Malawi have actually two denominations of notes with with China imprint there but then it's not just writing in China but actually showing major defining project that they did in those countries a lot of them are dams then some are assembly some are universities you know very solid investment and so they have something to show but of course that is just one side of the story there are always two sides to every story yeah there all two sides story but China is looking to realign his investment portfolios I'm sure you know that away from a bit of a jumbo projects into smaller Nimo projects across Africa or developing countries to put it that way what would this mean for Africa Africa needs Mega infrastructure financing needs for example we have a lot of uh projects project for example in Nigeria is a mega one we've got uh other projects that need big money such as that jakut steel so we need quite a whole lot of money we need mega projects across the continent so now China seems to be decelerating a little bit is China telling us something here no we remember that one of the contentions um is that there are accusations that there are some Clauses in Chinese contracts that are amount to waiver of sovereign immunity there are also the case that we've just discussed on on their imprint on the currencies and then I mean some critics will say wait a minute we we are just talking about frankophone angr phone Lua phone are we now going to start talking about China phone or India phone so there are critics of of some of those but the fact of the matter is that the China tends to be driven by profitability and viability of these projects because um you know that's why they writing those into the into those Clauses into their contracts and then of course you've seen the Mozambique case you've seen some other countries in fact even Nigeria our presidential planes were are seized because oun State you know played foul and forgetting that federal government guarantees these loans and then you know whatever you do will reflect on on on federal government so so you have for that those those caution so they may they may be minded to start rethinking their exposure to Big Investments and begin to look for smaller on that are more defin and don't forget that their their investment framework agreement or their their whatever chapter that they enter into with countries they try to protect themselves so they they invoke all those most favored nation Clauses and all these National treatment Clauses and seek all those protection not just for China government project but also for the projects of their own country of their of their companies so that's that's why why we had they have to seize our plane because they they were relying on the protection in the in the treaty so so if if the mega ones are not are failing maybe because as we have a big history of failure of big projects in our country they may begin to head to smaller ones or even more private sector PPP driven ones which have better scope for of of succeeding and and sustainable yeah so it's not unexpected that they may have to start moving that way okay Professor let's get to this very important part of the conversation how would Africa really balance his Western economic policies I'm not sure China really talk about policies in Africa he wants trade he wants investment he wants money that's what China Beijing want but basically we still implementing Western economic policies agenda where is the meeting point or the point of Divergence in terms of we need money and trade from China but here we talk about our policies we do IMF World Bank policies well what is is it's not that much of policies to be honest because China itself has emed all those Western policies but they use they had a very strong leadership they have strong political leadership they have they have better control they have better um approach to macroeconomic management and they have better approach to economic leadership than than our countries and our continent respect fact Professor the IMF the World Bank still seem to be dictating things around here whether it's Nigeria Kenya in Ghana elsewhere it's still about Western influences in terms of policies whether it's is subsidy whether whatever Yes W please goad the Western influence wouldn't go away remember it wouldn't go remember what I said before I said we were consigned you know by Design we as a country Nigeria and Africa we are consigned as producers of raw materials for the West to consume and process and bring to us to to consum so it was a design deliberate design by them and that means that they made us by design an import dependent economy and it was in their interest to emasculate our economy and keep dumping things on US policy inconsistencies one size fits all all kinds of things and then give you the money even though they they worry less about how you dispense that and they worry less about the cost benefit analysis so what you see is that our our countries and our leaders inexorably drag us into dep trap and so that is orchestrated but we are not saying that China doesn't borrow China does borrow but they have a different attitude to economic leadership and management and all that so they they they control but now now their biggest trading partner used to be United States United States is is is causing problem with with China right now and China is having to think twice and begin to find stronger Partners elsewhere because it's it's no longer going to continue with that tradition of $50 billion 500 billion deficit we they have with America and all that all that accusation of 300 billion every year lost on trade secret and and on intellectual property loss all of those are now history because America is no longer taking it as easy as it was so they now have to look for friends and look for more expand into our and they have the biggest reserves and they have to invest those reserves in projects that will give them reasonable return so they have their motive and we have our challenges our challenges is that we have allowed our economies to be emasculated by those structures of dependency led by the west and then of course accentuated by the britam institutions articulated by them so we have to fight our way out of this and then do some Balancing Act between how much we Expos to West yeah that's my question because last December African leaders were in Washington with President Biden for the African leaders Summit everybody had breakfast lunch dinner whatever there and here they are having dinner again in Beijing meeting with China so what what is what exactly does Africa want who are we in bed with really and why do you have to no I'm look we could be in bed with everybody but we have a clear objective what objective that's what I'm trying to understand is looking we're going left right before but I don't we can see the result of those M the objective is the same every country in the world is looking for investment even America the only problem is that America 60% of World Trade denominated American dollar America owes the greatest debt but America will never pay their debt because it is all denominated in their dollar they keep printing more dollar but every country even China itself needs investment what happens is that we are very clear about what kind of investment we need we need to free ourselves from that bondage of being an import dependent economy and for you to do that you have to add value to your natural and mineral resources but you do need infrastructure so you need infrastructure that connects to those so the Nexus is the infrastru n between the infrastructure and that is what and we need security so you have security you have infra investment in infrastructure and then of course you need trade because you produce all that you got to trade them to be able to earn those dollars that you are going to use to balance your your your your books and but then more importantly though more importantly though Africa needs to intensify their Yuan uh currency like Nigerian currency uh swap trade we need to do get more more of the swap yes we need to get more swap because if we are our trade volume with with uh China is about 23 billion do and then Africa $28 billion if we can get that $28 billion on Swap then it will reduce the pressure about over 40% of the global our trade is is in with China if we can take that off and then nmpc getting off this importation of crude Will O oil will now remove another 40% then Nigeria would have eventually rested over 70% you know of of our exposure to Forex and we can have a more stable Forex regime rather than continuing to look for dollar to do business with China but they are still doing it to I have to tell you that even though it seems that the swap has kept quiet but when last year ending of last year I ordered equipment from China and they told me to to go to some local bank and do X transfer and that's essentially what they are doing they are doing it but it needs to be increased to the Quantum of our trade volume with China uh Prof let's sum it up what should be the takeaways for Nigeria in particular at the Beijing summit we're seeing uh press statements from the presidency talking about a number of deals being signed in power sector a few others what do you make of that what do you think that our take home should be no I think Nigeria is going for a much more strategic and comprehensive uh bilateral relations with China and I think it going to work because what they are looking at is although the various facets of it would be sectoral because there are some clear sectors like digital economy bioeconomy and circular economy all of Green economy and there are so so sectors blue economy all those sectors but there are deeper cultural social cultural relationship educational relationship that they want to make sure that so that we can weave that strategic relationship into the social and economic fabric of both Nations so Nigeria is heading in the right direction and we we need them and don't forget that this is not the first time China has actually wanted to embrace Nigeria I remember sometime when they wanted to actually deal with our power infrastructure and settle it once and for all but our visiting team didn't give them the opportunity that they wanted and then and then of course they they got the oil that they wanted in N public and all that but there are many such things so this is a very positive step to move forward and then have cultural exchanges you know what they call City cities and exch all kinds of things both on the cultural the educational you know the economic this maybe this is a time we should allow also one of the Chinese Banks to put their footsteps here in Nigeria get a banking license and operate from Nigeria maybe that will help the young swap deal a bit more maybe maybe we should have get to allow them into the financial services industry but that's that's really interesting it's something we're going to consider for another day thank you so much Professor kenif we really appreciate your knowledge and experience uh on this major economic discuss thank you so much for tonight we wish you uh all the best [Music] [Applause] [Music]