Former Finance and Co-ordinating Minister of Nigeria, Dr Ngozi Okonjo-Iweala has shared her thoughts on the recent $60 billion investments by the Chinese government during the Forum for China-Africa Cooperation (FOCAC)
In an article on Financial Times, Okonjo-Iweala shared that the debt issue for Africa is one to be worried about while adding that the investments by China “gives African countries and the African Union an opportunity to work with China to seize the initiative to establish a strong and sustainable development path.”
She also said that China is already Africa’s largest trading partner for infrastructure finance. Dr Okonjo-Iweala agrees that the investments from China will be used to establish a “network of clean, resilient infrastructure, like solar and wind farms, such as we have in Morocco, Burkina Faso and Kenya, and sustainable public transportation projects like in Ethiopia, Rwanda and Nigeria.”
She also quoted IMF report on the state of foreign debt in the Sub-Saharan African which is already 26.3 percent in 2009 to 48.1 percent presently.
China, she said might not be contributors for all these debts while adding that “African countries need to seek a good balance of concessional loans, grants and foreign direct investment, individually and collectively to sustain their development. China is open to this.”
She also shared her experience as Nigeria’s Finance Minister (2011-2015) when she worked to secure Chinese investments that led to the building of the Abuja-Kaduna light rail and the four new airport terminals in Lagos, Port Harcourt, Kaduna and Port Harcourt. According to her, Chinese loans should be used to build “sustainable regional infrastructure projects that can unlock the continent’s potentials.”
Ngozi Okonjo-Iweala continued in her article that;
“A new report from the Global Commission on the Economy and Climate, which I co-chair, has found that bold climate action could yield economic benefits worth $26tn between now and 2030. Bold climate action could also generate more than 65m new low-carbon jobs in 2030, equivalent to the entire workforces of the UK and Egypt today combined.
These benefits would extend to countries big and small, including those in Africa. This is supported by other research by the Global Commission focusing on Uganda. This found that green growth approaches could increase the country’s GDP by around 10 per cent compared to business-as-usual by 2040, while also reducing greenhouse gas emissions by 28 per cent.
But this opportunity does have a shelf life, which is why we must act quickly and decisively. From 2000 to 2017, the Chinese government, banks, and contractors provided $136bn in loans to African countries. More recently, China’s investments in Africa have become a focal point of its Belt and Road Initiative, which supports roads, railways, ports, and other infrastructure projects across almost 70 countries, including some in Africa.
In order to fully unlock the benefits of a low-carbon economy, it is imperative that this initiative be underpinned by principles of sustainability.
Africa’s progress toward a low-carbon development path is a golden opportunity for the continent to shine. Climate-smart agriculture could increase crop yields, slow down soil degradation, and boost farmers’ incomes. Compact, co-ordinated urban growth could make Africa’s cities more efficient and minimize resource needs. Off-grid solar systems could be the fastest way to reach the 590m Africans without access to electricity, while the continent’s abundant sunlight could power the low-carbon national grids of the future.
As China transitions to a more sustainable economy itself, it can offer lessons to countries in Africa that want to follow its industrialisation path. The Chinese government is working to address its smog problem by switching from coal to natural gas plants and reducing production in heavy-emitting sectors. It is also setting a price on carbon. Its emissions trading scheme, which was formally announced late last year, is by far the largest in the world.
Together, China and Africa make up one-third of the world’s population. Increasing ties between the two could have a vast positive impact for the world’s economy and climate. China’s experiences and expertise should go a long way in helping African countries develop their renewable resources.
But ultimately it is for Africa to forge its own path, with self-determination, towards a more sustainable future. And by focusing on sustainable infrastructure, African leaders will be serving the interests of Africans today as well as future generations.”
The article full article is published in the Financial Times