The Belt and Road

The role of BRI on the economic integration in Eastern Africa

Africa has a long history with China since the first contact along the east coast of Africa and the Indian ocean made by Zheng He, during his expeditions of about 600years ago. This same contact has continued till date and in the most recent times manifests under the auspices of the Forum for China- Africa Cooperation (FOCAC) and the Belt and Road Initiative (BRI).

Africa and China have a long history together since the Treasure voyages first approached China along the east coast of Africa and the Indian Ocean 600 years ago. Under the auspices of the Forum on China–Africa Cooperation and the African Belt and Road initiative (BRI), this link continues to this day and has recently become apparent.

The BRI which was proposed in 2013, by Chinese President Xi Jinping ,when he visited Kazakhstan, aims at rebuilding the ancient silk route that linked Asia and Europe to a modern equivalent stretching across Asia, the Middle East, Europe, and Africa by creating a network of railways, roads, pipelines, and utility grids to link China and the rest of the world; with the designed to boost trade and commerce.

The BRI plan, launched by Chinese President Xi Jinping during his visit to Kazakhstan in 2013, aims to rebuild the ancient Silk Road by establishing a network of railways, roads, pipelines and public power grids that link China to the rest of the world Connecting Asia and Europe to a modern Silk Road Spanning Asia, the Middle East, Europe and Africa.

According to a report from Ministry of Commerce (MOFCOM), China has set up 82 overseas economic and trade cooperation zones that have offered host countries a total tax revenue of over US$2 billion and 244,000 jobs under the BRI. The multibillion-dollar Initiative backed by financial institutions, such as the Asian Infrastructure Investment Bank (AIIB) with capital of $ 100 billion, the Silk Road Fund with capital of $ 40 billion, the China Development Bank (CDB), the Agricultural Bank of China, China Export-Import Bank (EXIM), and the New Development Bank of the BRICS countries has metamorphosed as one of the best framework for international cooperation, won warm response and active participation across the globe.

According to the Ministry of Commerce, China has established 82 overseas economic and trade cooperation zones, which provide more than $2 billion in tax revenue and 244,000 jobs for the host countries. The one billion plan is backed by the Asian Infrastructure Investment Bank, the Silk Road Fund, the China Development Bank, the Agricultural Bank of China, the Exim Bank of China and the BRICS New Development Bank, among others It has become one of the best frameworks for international cooperation and has won warm responses and active participation around the globe.

Currently, a total of 126 countries and 29 international organizations have joined this Initiative, among which 37 African countries and African Union have signed cooperation agreements with China. President Xi, during the 2018 FOCAC summit held in Beijing, stated the need to align the BRI with African Union agenda 2063 and the United Nations sustainable development for Africa’s development programs.

At present, a total of 126 countries and 29 international organizations have joined the initiative, of which 37 African countries and AU countries have signed cooperation agreements with China. Xi told a Forum on China–Africa Cooperation summit in Beijing in 2018 that the World Bank needed to be aligned with the African Union’s agenda 2063 and the United Nations sustainable development plan for Africa.

African nation’s quest to industrialize, develop and boost their economies through harnessing their huge demography and abundant resources are presented with an opportunity to tap from China’s accumulated rich experience in industrialization and modernization through the BRI.

The African countries seek to industrialize, develop and promote economic growth through the use of their vast populations and vast resources, this provides an opportunity to take advantage of China’s rich experience in industrialization and modernization through the Global Productivity Initiative.

Trade between China and Africa scaled up in 2018 and recorded the highest growth rate in the world. According to statistics from the general administration of customs of China, in December 2018, China’s total imports and exports with Africa were US$18.27 billion, up 15.5% year on year and 2.1% month on month. Among these, China’s exports to Africa were US$9.55 billion, up 3.9% year on year and 3.0% month on month; China’s imports from Africa were US$8.72 billion, up 33.7% year on year and 2.2% month on month; making China still Africa’s largest trading partner.

The east African countries feature more active in the BRI participation (especially those located close to the horn of Africa) as they are strategically located and serves as the BRI corridor to Africa. In 2011, some of these countries suffered a severe drought which affected the economy and the lives of the people; countries such as Somalia, Djibouti, Ethiopia, Kenya, Uganda, and their neighboring countries were affected.  However, their stories are changing today, the BRI has brought hope and changes to these countries through the provision of infrastructures (rails, roads ports, airports electricity generation telecommunications and various forms collaborations) that have spun industrialization, trade, and commerce, which have contributed positively to their economies.

For instance, the Port of Djibouti is currently a major regional hub in East Africa, especially Ethiopia’s seaborne trade, which coordinates about 70 percent of its total import and export through the port. The port handles around one million containers per year and seven million metric tonnes of cargo and it is predicted to have the capacity of adding $4 billion to the country’s GDP as well as industrial and job opportunities; The Ethiopia-Djibouti railway has facilitated cross-border trade and commerce within the region coupled with 14 industrial parks project; the Sudan Khartoum refinery; the Eritrea Hirgigo power plant and In addition, Mombasa-Nairobi railway and its proposed extension to cover other landlocked countries in East Africa such as Uganda, South Sudan, Burundi and the Democratic Republic of Congo have all boosted the economic integration and development within the region.

As China marks the sixth anniversary of the Belt and Road Initiative, East African countries that are yet to join the BRI are provided with the opportunity to integrate into a new global system of economic activities. While China seeks to seize fresh economic opportunities in higher-value-added productive activities, the shifting of China’s low-wage labor-intensive jobs opens a new window for east African nations to seize the opportunity provided by their own emerging demographic dividend period.

The 2019 Worldometers report estimated the total population of all the East Africa countries to be 445.5million with a growth rate of 2.2%annually, making them number 1 in African among sub-regions population rank with young and increasing urbanized workforce, and it’s projected to reach 888.1million by the year 2050.

Although this indicates high performance in certain nations economic growth, however, it has not been in areas that are labor intensive. This is because the significant skills needed for the labor market of east African transforming economies is inadequate.

As such, one of the most significant issues they face on a daily basis is the skills shortage among local. Skills shortages undermine structural transformation and the development of the private sector.

As a result, east Africa’s economy still heavily relies on activities that mostly require low-skilled labor (such as agriculture or natural resources), there by, stunting the demand for skills. Owing to that, it is necessary for China and East African leaders to invest more in closing the skill gap as this will guarantee economic and social returns for both parties.

Therefore, the 2019 BRI forum calls for African leaders especially the east Africa countries to start investing in their youth and seize the opportunity provided by the rising African youth to actualize the ‘Africa we want’. China and Africa cooperation will continue to grow and there is no doubt that Africa is increasingly aware of the benefits of BRI cooperation with China.

( The authors are master’s students of College of International Education and culture, Zhejiang Normal University)

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