Limits of the sacrosanct sovereign national asset (2)

BUSINESS A.M EDITORIAL

Last week, the ninth summit and 2024 edition of Forum on China–Africa Cooperation (FOCAC) was held in Beijing. It was another gathering of African political leaders attended by all African countries except one – that is Eswatini (formerly known as Swaziland). The reason for Eswatini’s lack of interest in FOCAC is based on its recognition of Taiwan as a sovereign nation, a position that China strongly and strictly rejects. By implication, all the other 53 countries care less about Taiwan’s status with respect to its diplomatic relations with China. Looks fine, right? That could be explained away by other African countries who see nothing wrong with trading away their own sovereignty, whether by loan default or by breach of mutual agreements. 

In the previous summit, held in Dakar, Senegal, in 2021, China announced its outward vision and agenda for China-Africa relations for another three years, with the long and  winding theme to “Deepen China-Africa Partnership and Promote Sustainable Development to Build a China-Africa Community with a Shared Future in the New Era.” In Senegal, the quantitative reduction of China’s financial commitments from $60 billion in 2018 to $40 billion was evident that year. This year, however, another commitment has been made for Africa in Beijing. Although China pledged $50.7 billion to Africa over three years in credit lines and investments, it made no commitment on debt relief. Participants on China’s pilgrimage thus need to ponder over the nature of relationship with China, which tends to portray China as benevolent. 

There is no doubt that the times of reckoning would come for all beneficiaries of China’s supposed benevolence. That time, long grammar and well-worded themes won’t work. The only operational language is that of recovery by any means possible. That recovery could be one of debts or damages arising from breached contracts. The leaders of African countries that routinely travel to China like a flock of sheep for FOCAC may need to be asked if they could muster enough confidence, courage and patriotic concerns to convene similar meetings at Addis Ababa or elsewhere for conferences involving common causes, common destinies and common prosperity. 

Countries within and outside Africa have had experiences with China on trade, debt and contractual agreements. The Nicholas Ossai legislative panel of the House of Representatives Committee on treaties, protocols and agreement during Buhari’s second term dealt with due diligence over some loans in 2020. It was meant to forestall national embarrassment when China came calling for loan repayment. It has not even got to that of loan repayment when another entirely different bilateral dealing prompted China to go for broke, particularly caring less how its action might have affected people’s perception about its extreme shrewdness. The attachment and seizure of Nigeria’s strategic sovereign national assets recently needs no further elaboration. 

In South Asia, Sri Lanka had a taste of China’s business approach. China’s finance of the Hambantota port through a loan agreement with Sri Lanka was one from which Sri Lanka learnt a hard lesson too late as it had to cede the same port, a national strategic asset, to China. That alone gives China a place for proxy military and commercial activities. Some don’t see the nuanced colonial base. In retrospect, Ossai’s concerns on the China loan was justified as the vulnerability of Zambia to China on account of sovereign loans became evident. The railway projects for which Nigeria took loans may well have become China’s asset if nothing had stopped it, just as China Exim Bank clarified in 2019 that it now has full control over Kenneth Kaunda Airport, Zambia’s main broadcasting corporation, and ZESCO power plant, the country’s main public electricity utility. It is therefore of interest to know how veritable China’s claims of “no strings attached” on loans is.       

In a bilateral trade relationship in which the trade benefits are skewed towards China, it makes more sense for Nigeria and other African countries to be aware that China seeks to use FOCAC to counter growing competition in Africa from the United States, the European Union, Japan and others. Countries that are led by patriotic leaders will have no difficulty in recognising that feasibility studies on projects funded with Chinese loans are often shoddily done and many are poorly packaged projects, doomed to failure; yet they pass China’s loan disbursement tests. A true measure of the benefits from Nigeria’s attendance of FOCAC will be how much of a trade surplus Nigeria was able to achieve from the summit. It might also be of interest to know if Nigeria’s president was able to meet and persuade China’s President Xi Jinping to authorise the release of Nigeria’s sovereign assets seized outside Nigeria recently.