ByYunnan Chen
This week, European and African leaders sit down in Brussels for the long-awaited, twice delayed EU–Africa summit. This will be an opportunity to set a new agenda for cooperation between the two regions whose fates and economic futures are increasingly intertwined. Years of tension over migration issues, recent controversial decisions around discriminatory travel bans from African states in the wake of the Omicron variant of Covid-19, and the stark inequity of vaccine distribution – all of this makes it crucial for Europe to present a credible agenda, breaking from the past.
It’s also an opportunity for Europe to present an alternative narrative to the emerging power in the region: China, whose shadow hangs over the summit proceedings. The Brussels summit is hard on the heels of last November’s Forum on China–Africa Cooperation (FOCAC), which has been the dominant platform for China–Africa engagement over the last two decades, and a powerful symbol of China’s role as a benevolent partner to low- and middle-income countries.
This comes at a time when borrowers are increasingly risk averse in relation to Chinese lending practices, and critical of controversial loan clauses and non-transparency. This is a space for Europe to compete with its ‘systemic rival’ for economic and soft power, and initiatives like the Global Gateway are direct counter-offers to China’s Belt and Road Initiative (BRI). However, Africa should not simply be viewed as a venue for strategic competition, but one that holds intrinsic opportunity – as our work at ODI demonstrates.
China’s continued relationship with Africa over the last two decades offers lessons in success – as well as pitfalls – for Europe to draw from, and to forge a new distinct cooperation agenda with European characteristics.
A platform of political equality and mutual respect
In engaging with leaders, China’s approach is powerful: FOCAC is premised on a principle – however real – of sovereignty, political equality and mutual respect, in ‘a partnership of equals’. Practically, this is evident also in the demand-led approach of Chinese development finance, which tends to be more strongly guided by a recipient government’s needs and requests. For Europe, a new agenda for cooperation must take into account domestic African ambitions, such as the African Union (AU) Agenda 2063, and centre the voices of African states and civil society.
A clear PR advantage that China has had over European states is its history as a global power without the baggage of overseas colonialism – something European partners sometimes struggle to shed in their approach. Political equality and a Southern sense of solidarity are a key part of the rhetoric, despite the power and economic asymmetry. African leaders in Beijing get the same red-carpet welcome as any other head of state, which sends a powerful political signal.
While Europe has raised its walls to migration in recent years, China has over the years encouraged migration selectively, through programmes of people-to-people exchanges that boost its soft power: these span from full scholarships for African students to study in China, to inviting researchers and businessmen, and even providing training for officials and bureaucrats. These gestures may be small, but they build goodwill and trust, showcase the Chinese model of development, and help to export values and boost knowledge flows in Africa.
Europe’s fortress mindset to migration makes this kind of people-to-people exchange more difficult. The summit is an opportunity to set a new tone, in fostering relationships and in building political capital between leaders and stakeholders across the two continents, but also to shift from the securitisation of migration as border protection, and to capitalise on people-to-people exchange that is mutually beneficial.
Africa as opportunity – not charity
While Chinese lending has been the subject of scrutiny in the last few years, the last two decades of China–Africa cooperation – and the wider BRI – have seen a steady shift away from aid and official development finance, towards commercially driven trade and investment. Often this comes from state-owned and private enterprises acting independently, recognising the economic potential and market opportunities of African states. Europe can take its lead from China’s recent pledge to expand imports from Africa, and work to open European markets and support the export of African agricultural and processed goods.
The Global Gateway is a positive first step in supporting regional integration and the development of the African Continental Free Trade Area (AfCFTA), which can support broader structural transformation. But partners must also recognise that such infrastructure investments are long-term and need state backing. Chinese loans have been criticised for debt woes, but have often played a crucial role of ‘patient capital’ that recognises the long-term payoff, as well as providing guarantees and incentives to encourage private sector participation along the BRI.
This is something Europe has yet to fully embrace: development cooperation has historically focused largely on poverty reduction and social development, rather than economic growth and transformation – meanwhile Chinese foreign direct investment to Africa has grown consistently over the years, reaching over US$4 billion in 2020. Expanding beyond aid to economic partnership, centring around investment and trade, can open up possibilities for European firms and investors to take advantage of the growing consumer market in African economies.
Some European states – notably Germany – have taken similar initiatives in encouraging German firms to go abroad, including to Africa. However, the scale is still small, and how this can be cohesively expanded across the continent (while avoiding intra-European competition) will be a key challenge.
Support technological capacity and autonomy of African partners
There are also plenty of lessons from China to avoid. Adherence to sovereignty in Chinese approaches to cooperation has left ample space for corrupt practices. A lack of transparency and weak project due diligence – particularly around debt-financed projects – have become among the largest sticking points in ensuring future fiscal security and a post-pandemic recovery. European commitment to transparency, sustainability and quality is an area of distinction and should be treated as a competitive edge.
Europe should also play on its own technological and normative strengths. There have been real concerns in the use of Chinese technologies, particularly around communications (notably a controversy some years ago around the bugged servers of the AU building), and in the ability of African institutions and bodies to operate and manage new Chinese-built infrastructure systems after completion. While Chinese finance claims it doesn’t impose conditions, the reality is that there is strict conditionality on procurement that favours its own companies, goods and equipment, which can frustrate local desires for knowledge and technology transfer.
In new technologies, Europe should seek to expand cooperation around capacity-building, incorporating transparent, credible knowledge and technology transfer into Global Gateway initiatives. Areas such as satellite and remote sensing systems, high-speed rail, telecommunications and digital technology will be key focuses in China’s cooperation with Africa going forward – but they are also European areas of quality. European experience around urbanisation and sustainable infrastructure also offers the potential for knowledge-sharing in Africa’s growing cities. Expanding African engineering and technical capacity, and ensuring that Chinese technologies do not become a dominant monopoly in these new sectors will be mutually beneficial: both for European commercial and strategic interests, and in making African markets more resilient, diversified and less dependent on single large partners.
Vaccine cooperation is a timely endeavour – and an area where Europe’s response has thus far been feeble. FOCAC’s pledge of $1 billion-worth of vaccines was excellent optics, but it was by no means charity: a large part of the pledge was for sales and domestic production, benefitting Chinese firms. This is another area where European research centres can play a decisive role in providing public goods, through the opening and sharing of intellectual property in building production capacity in a high-demand area.
A final area for collaboration is in strengthening Africa’s financial architecture. Chinese lending has been an attractive source of project finance in the last decades when the cost and access to finance have been challenging for African sovereigns. But African public development banks remain underused institutions. European development finance institutions can also play a key role in capitalising and enabling regional and national development banks in Africa to play a role in the future green recovery.
Shaping an EU–Africa partnership
Going beyond the geostrategic rivalry, there are positive lessons that the China–Africa relationship can offer to European stakeholders looking to shape a competitive, distinct offer.
The summit gives Europe a chance to change the tone, and build a more equal, demand-led political and economic partnership. Shifting focus to economic development and transformation is a welcome one, particularly in emphasising a sustainable development path out of the Covid pandemic. Here, Europe can follow China’s lead in emphasising trade, and in recognising the intrinsic commercial and investment potential of African economies, beyond the role of donors. This is something that the Global Gateway can help support, while playing to European sectors of comparative advantage in sustainability, telecommunications and digital technology. The summit offers a first step for both Europe and Africa to become stronger: as partners, collaborators – and as neighbours.
Yunnan Chen is a Senior Research Officer in the Development and Public Finance programme. Her research interests centre around development finance institutions and infrastructure finance in the Africa region, and she is a specialist on China’s overseas development finance.
This blog benefitted greatly from comments and inputs from Marta Foresti, Mark Miller, Tegan Rogers and Sara Hussain.
Credit | ODI