Chinese infrastructure financing in Africa is shifting towards trade and investment, leaving some priority projects in limbo. Despite a successful Nairobi Expressway, Kenyan roads faced delays due to lack of funds. President William Ruto sought a $1 billion loan from China, with discussions ongoing.
The final phase of a railway line in Kenya and Uganda was halted as Chinese financing dried up, leading to contract cancellations. Chinese officials emphasize the boost in two-way trade, reaching $282 billion, but Africa’s exports to China fell by 7%. Efforts to support African manufacturing and agriculture have fallen short, impacting trade deficits.
Attempts to increase exports to China face challenges due to regulations. For example, Kenya’s avocado exports to China remain low at 10% of total. Without value addition to exports, African nations risk fueling Chinese economy with raw minerals.
As African leaders seek to bridge trade gaps and diversify economies, China’s focus on trade rather than infrastructure poses challenges. Without increased value addition and manufacturing, the trade deficit with China may continue to widen.
Reuters