Chinese President Xi Jinping has pledged financial aid package exceeding 360 billion yuan approximately $50.7 billion to Africa over the next three years. This announcement was made during the ninth Forum on China-Africa Cooperation (FOCAC) Summit, which took place in Beijing. With leaders from over 50 African nations in attendance.
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Xi announced a $50 billion financial package for Africa over the next three years. This support is a combination of credit funds, assistance and private investments from Chinese firms.
The aid includes $140 million in military assistance and $140 million in food aid. This is an increase in military support compared to previous years.
The $50 billion pledge outstrips the $30 billion announced at the previous FOCAC in 2021 but is lower than the $60 billion pledged in 2015 and 2018.
Xi Jinping announced that the country will provide 360 billion yuan in financial support to African nations over the next three years.
210 billion yuan will be allocated for credit facilities. 80 billion yuan will be provided as various types of assistance. 70 billion yuan will be channeled into investments by Chinese firms operating in Africa.
The Forum on China-Africa Cooperation (FOCAC) is a triennial event that plays a crucial role in shaping the economic relations between China and Africa.
During the summit, African leaders including South Africa’s President Cyril Ramaphosa and Kenya’s President William Ruto engaged in one-on-one meetings with Xi to discuss issues ranging from trade and investment to debt restructuring and infrastructure development.
The country has committed to continue its investment in building and improving Africa’s infrastructure including transportation networks such as railways and highways.
Tanzanian President Samia Suluhu Hassan secured Xi’s commitment to push the railway project connecting Tanzania and Zambia.
The country is reportedly pledging $1 billion toward this project. African nations are increasingly focused on expanding their agricultural exports to China.
Zimbabwe reached an agreement to export fresh avocados to China, while Kenya negotiated access to Chinese markets for its agricultural products.
In a bid to support green energy development, Zambian President Hakainde Hichilema secured a deal between Zambia’s state-owned power company ZESCO and PowerChina to expand the use of rooftop solar panels in Zambia.
As part of the pledged financial support China intends to increase exports of green tech products such as electric vehicles and solar panels to the African continent.
These products, which face steep export tariffs in Western markets are seen as a win-win for both the countries, as they can contribute to Africa’s energy security and environmental sustainability.
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The focus on green technology aligns with global efforts to address climate change and African nations stand to benefit from these initiatives. Zambia has already signed agreements to expand solar energy use in collaboration with Chinese firms.
An issue addressed at the summit was the growing debt burden many African nations face as a result of Chinese loans. China is Africa’s largest creditor with many countries relying on Chinese financing to build infrastructure projects including bridges, railways and power plants.
While Chinese’s loans have contributed to African development. African leaders are negotiating with Beijing for more favorable loan terms to ease their debt burdens.
During the summit, Nigerian President Bola Tinubu and Kenyan President William Ruto discussed restructuring existing debt and obtaining new loans to complete vital infrastructure projects.
China has been Africa’s largest trading partner since it surpassed the United States in 2009. Trade between the two regions has grown exponentially over the past two decades, from less than 100 billion yuan in 2000 to nearly 2 trillion yuan in 2023.
In the first seven months of 2024 alone, China-Africa trade reached a record 1.19 trillion yuan.
The country has also channeled more than $180 billion into Africa between 2000 and 2023 primarily for infrastructure development.
Last year, Chinese lenders extended loans worth $4.61 billion to African nations, the highest level of lending since 2019.
Xi pledged to increase China’s military assistance to African nations allocating $140 million to this purpose. This is the largest military aid package China has ever committed at a FOCAC summit.
The military aid will be used to train 6,000 military personnel and 1,000 law enforcement officers. This training aims to strengthen security collaboration and enhance Africa’s capacity to address local security challenges.
The aid package also includes a partnership to implement Xi’s Global Security Initiative, a vision for reshaping global security away from US-led alliances.
Xi outlined 10 key areas for cooperation over the next three years including infrastructure connectivity, trade, security and green development.
Infrastructure remains a top priority, as China has invested heavily in building roads, railways and power plants across the continent through the Belt and Road Initiative (BRI).
The Chinese leader also reaffirmed China’s commitment to expanding infrastructure cooperation with 30 new infrastructure projects planned to improve connectivity across Africa.
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