China is deepening its engagement with Africa as geopolitical competition intensifies, with President Xi Jinping meeting the leaders of Botswana and Togo in Beijing. The visits highlight Beijing’s sustained diplomatic outreach and growing interest in African copper supplies, alongside its push to strengthen trade and mining partnerships.
Yet access to mineral wealth does not automatically translate into economic development. African governments face the challenge of converting mining revenues and value addition into industrial diversification, infrastructure and jobs. In the energy sector, Chinese investment could also help connect national electricity grids, but realizing that potential will require stronger regional coordination and planning.
In this week’s episode of the CGSP Roundtable, Eric, Geraud and Cobus discuss China-Africa diplomacy, strategies for maximizing Chinese investment in electricity integration, and the continuing debate over China’s role in Africa’s debt burden.
Show Notes:
📌 Topics Covered in This Episode
- China Deepens Diplomatic Engagement With African Leaders
- Botswana’s Copper Reserves and China’s Mineral Strategy
- Who Benefits From Africa’s Mineral Wealth?
- China’s Role in Africa’s Future Electricity Grid
- Rethinking China’s Role in Africa’s Debt Crisis
- Why the China Debt Trap Narrative Persists
Transcript:
ERIC OLANDER: Hello, and welcome to another edition of the China in Africa podcast, a proud member of the Sinica Podcast Network. I’m Eric Olander. And as always, I’m joined by CGSP Head of Research Cobus van Staden, coming to us today from Johannesburg, South Africa, and our Africa editor Geraud Neema, joining us as always from the beautiful island of Mauritius.
A very good afternoon to both of you.
COBUS AND GERAUD: Good afternoon.
ERIC OLANDER: Well, we’re going to talk about three topics this week on the roundtable.
We’re doing these roundtables more because there’s so much to cover, and we’re just going to pack it all in. And so it was a busy week in China-Africa diplomacy. Geraud is going to talk to us about presidential visits to Beijing from the leaders of Togo and Botswana, and why it’s important to focus on this, even though nobody around the world paid much attention to it.
We’re also going to take a look at a new paper that Cobus put out on China-Africa research—sorry, energy research. And then we’re going to talk also about a video on the debt trap, just do a media check-in on narratives that are circulating online about the debt trap, and Geron’s got quite a few things to say on that.
Geraud, let’s go ahead and get started.
It was a very busy week in China-Africa diplomacy. For the most part, we have not seen this frequency of leaders kind of show up in quite some time. And so I thought it would be interesting for us to take a look at the visits of leaders from Botswana and Togo.
Tell us a little bit about what is going on.
GERAUD NEEMA: So from the end of last week into early this week, we had an overlap of two African heads of state visiting Beijing. We had President Duma Boko from Botswana, who was in China from October 12th to 17th.
And we had the head of council, and I have to get it right, because Faure Gnassingbé is not president anymore.
ERIC OLANDER: That’s right. We discussed this, Cobus, about whether or not he was president or not.
GERAUD NEEMA: He’s not president.
ERIC OLANDER: President of the Council of Ministers.
GERAUD NEEMA: Exactly, exactly.
Because there’s a head of state, there’s a president in Togo, and there’s not a president of the council in Togo. He’s the president of the council.
ERIC OLANDER: Hold on, I just want to bring something up here.
The way that CGTN, they just, it just crossed on screen how they named him. So they seem to, and they get these things very, very correct. They called him the president of the Togolese Republic; I thought I just saw.
GERAUD NEEMA: No, he’s not. He’s not.
Faure Gnassingbé is the president of the council in Togo, which was, which came about after they modified the constitution last year.
And now in Togo, you have the head of state, the president, and you have the president of the council, who is at this moment Faure Gnassingbé. He is basically the man with all the power in the country, not the president anymore.
ERIC OLANDER: And there was a second visit as well, this one from the president of, this one is definitely the president of Botswana.
GERAUD NEEMA: Exactly, exactly. As I was saying, president of Botswana, 12 to 17, and president of Togo, president of the council of Togo, Faure Gnassingbé, from October 9th to 16th. An interesting part of that visit, both of them had in separate time, a separate time on October 13th, both of them had a face-to-face with Xi Jinping on October 13th.
So they covered the right range of topics, as you can expect. They covered the right topics for Togo. It was mostly about diplomacy and also about trade.
They mentioned the zero tariff policy. They mentioned the changes. They mentioned what Togo can win.
They also upgraded their diplomatic relations. Togo was upgraded, let me read it, to a Community with a Shared Future with China. So I don’t know where it stands in the current hierarchy of China foreign diplomatic relations, but it’s kind of higher than what many African countries have.
Why? I don’t know, but that’s what the upgrade had happened. Another upgrade also happened with Botswana.
Botswana, the upgrade really came, but still at a lower level because it was upgraded to a Comprehensive Strategic Partners of China. And for Botswana, the conversation was trade, but a lot of minerals conversation took place where Xi Jinping kind of laid out four principles of China’s engagement in the minerals sector in Botswana.
ERIC OLANDER: Walk us through that. What were the four principles?
GERAUD NEEMA: So basically, I’m going to read out the few elements of the Chinese readout. So I want to get it right.
So what basically happened was that it pointed out four principles. Let me find it here correctly. So it said the first principle was the principle that African resources belong to Africa and saying that Africans should not take part in the geopolitical competition.
And that’s not right. That’s not really beneficial to Africa. And China is willing and helping to help Africa formulate mining development principles and plans, and how they can take advantage of mining investment.
The second one is that the principle of cooperation should be based on friendship and common interest, and ensuring that both parties are mutually benefiting from this mining investment.
Third, the direction should be high-quality development. It means that value addition and transformation take place on the ground, and China is willing and ready to take part in that conversation.
And fourth, open cooperation on environmental issues related to mining investment.
So basically, Beijing was up there and saying we are ready to move on into the mining industry in Botswana, and we’re ready to really reinforce the presence there. Many may not understand why minerals are really central to the conversation with Botswana.
It’s because, since last year, since 2024, China acquired a major copper project in Botswana, the Khoemacau project. And since then, Botswana has become a major exporter of copper concentrates to China since last year. Here I’m going to give you just a few references so people understand, in terms of numbers, what we are talking about here.
I’m going to take the trade figures from last year, 2025, between Botswana and China.
In December last year, the whole China-Botswana trade was $1.2 billion. That was for 2025.
From January to August 2026, China-Botswana trade stands at $1.2 billion. So it means that by the end of 2026, the number for 2025 would be expected to go above that.
But the interesting numbers now come from the imports, what China has imported from Botswana. In total, China has imported $1.1 billion from Botswana, but out of the $1.1 billion, $1.09 billion was made up of copper concentrates coming from Botswana.
So it just tells you why minerals were really central to the conversation that Xi Jinping had with the Boko Duma of Botswana and why he emphasized the need for that. And the last point still on Botswana: why it’s become important, because China is still looking into diversifying its sources of copper around the world, especially around Africa, when you have the so-called competition and the tension, I would say, taking place in the DRC with the U.S. trying to be present.
Of course, you have China looking into different opportunities for copper diversification taking place in Zambia, in Botswana, looking even at Liberia, and opening its eyes to Tanzania and also in Mozambique. So you do have that diversification taking place. And this is why minerals were central to the conversation with Boko Duma from Botswana this week.
ERIC OLANDER: Ok, lots to unpack there. Let’s dive into this statement that China’s Xi says African natural resources belong to Africa. That was the headline that came off of Agence France-Presse and several other media that came out of the Botswana meeting.
I just want to bring up a tweet that somebody kind of posted in response to our story on this and to get both of your reactions to it. And so it says, ” Talk is cheap. Check the contracts, not the speeches.
If China controls the processing and technology, Africa stays poor no matter who owns the ground. We have been down this road,” and it has a South African emoji flag.
Cobus, 90% of Chinese imports from Africa are in the form of extractives. Geraud has pointed out a number of times that not only do the Chinese own the mines; oftentimes they own the trucking, the trucking services, but they also own the supply chains, and then they own the processing as well.
To this tweet, does it matter who owns the mines and who owns the minerals if everything afterwards is controlled by China, at least in the critical mineral space?
COBUS VAN STADEN: Well, you know, like that tweet, one would have to complicate it a little bit, right? Because I think, you know, I think it certainly matters. The question that comes up is, even if you do the processing, you know, at home, there’s a whole bunch of ways in which even doing processing at home doesn’t necessarily bring the kind of prosperity that one wants, right?
So on top of it, you know, my reading of what Xi was saying is that it implied also that African governments themselves have to kind of find this kind of, like, broad-based value addition strategy that they want, and then the people that they need to work with, you know. So in that sense, like the kind of geopoliticization of it, or the geopolitical aspect that he mentioned, I think was this kind of pointed, you know, kind of pushback against some of the, you know, some of the deals we’re seeing in, kind of in the DRC, for example. But as you say, like China, the larger problem, right, is that Africa is, and this is, Xi Jinping himself said it, and then, Chinese ambassadors, in kind of unpacking the statement, you know, like African ambassadors were, you know, kind of unpacking it more, and you know, and making the point that, you know, that Africa is stuck at the bottom of the value chain structurally.
The problem is that, you know, that position was authored by Western powers originally, but then China stepped into a system that, you know, kind of, you know, where it was also kind of occupying a kind of a position of privilege within an older kind of structure that kept Africa stuck at the bottom, you know. So how challenging that is going to look in a situation where, as, you know, Geraud and I were discussing in an intelligence recording earlier today, was, you know, if you have a situation like where the Chinese battery company CATL already owns a part of a big copper mine, and as, you know, kind of through other subsidiaries has, you know, kind of has offtake agreements to, you know, kind of for the copper already, if you’re talking about that basic de facto kind of vertical integration, you know, via kind of very complex international investment, then what is Africa owning the minerals looking like, you know?
And also, like, what does Africa owning the minerals look like in relation to all of these other, you know, kind of partners who are also kind of hell-bent on getting some kind of access to it without, and very kind of like indifferent to local value addition. So they think that is the real question.
ERIC OLANDER: Yes. So Geraud, let’s get your take on this very quickly. Is this just flowery rhetoric from Xi saying, yeah, sure, Africa owns the minerals at the end of the day?
And the Chinese, let’s be very clear here, the Chinese are paying for these minerals. They’re not stealing them. So in some ways that should go without saying that Africa owns the minerals, right?
But is this, does it mean anything if, as you have pointed out, most of that value chain is not controlled by Africans?
GERAUD NEEMA: This is the debate about the value chain, the value addition, all the ownership that, for me, has kind of become a bit emotional to a certain extent. When I see that tweet, I was like, what do you mean by owning? What do you mean that Africa should be owning that? And that’s, that talk is cheap, actually. What, even, what do we mean when we start thinking about that, when the contracts are not, and the value addition is made by a Chinese company?
Because the reality is, what do we want from the mining industry? We want the revenue of the mining industry to contribute to the development and diversification of the economy and doing that, all of that. So the question is: is it important that the one who mines is a Congolese flag, a South African flag, or is it important that what is mined, the revenue from it, is really used by the country for its own development?
And sometimes we kind of, we are too focused on the emotional part to say, we don’t see a Congolese flag out of this mine. We don’t see a South African flag on this mine. It doesn’t belong to us.
I understand the feeling to say, I want to own it, I want to develop it. But at the same time, those who are operating these mines are generating revenue that is coming back into the country’s coffers. And the question is: what are we doing with the revenue of the mining industry?
Are we diversifying the economy? Are we changing all of that? And most of the time, let’s talk about it.
ERIC OLANDER: Yeah, Geraud, don’t ask that as a rhetorical question; ask it as what is happening to that money.
GERAUD NEEMA: Exactly. Let’s talk about it.
The reality is when that money comes back, we don’t use it for mining, for economic diversification. We don’t use it to build infrastructure. We don’t need to use it to build anything else.
We don’t use it to really build our economy in a way that tomorrow mining is not central anymore. So because people don’t see where the revenue of the mining industry goes, they imply that the mining industry is stealing everything. Yes, they’re not sent people.
Yes, they’re also making money for themselves because they’re also investing in a risky environment. But we cannot deny the fact that when they pay taxes, when they generate revenues, when that money comes back into the country’s coffers, we do not manage that; we do not manage those revenues fairly for our own countries. So at the end, it doesn’t really matter who mines; what matters is what you do with the money that you get out of it.
So the second point about value addition as well. So yes, value addition can be problematic, but it still boils down to the same point. You want value addition for what?
Just so far, when you look at the debate in Africa, we want more value addition. More value addition is always attached to it because if we transform it a bit more, we’re going to generate more money from exporting it. That’s it.
You don’t have a lot of countries that really put them in a context of, like, we want more value addition because we want to connect it to X, Y industry. After all, X, Y industry is going to create X, Y jobs, and is going to create X, Y technology. And we are not part of that conversation because we do not see mining industry only from the, we only see mining for the perspective of revenue. And here, when I think of our friend Wei Shen, who always complained about the fact that when African talks about value addition, they don’t talk about it from a very industrial and development perspective.
They only talk about it from a very fiscal perspective because more transformation means more revenue, and that’s it. It’s so, if you’ve maintained the same structure of, like, embezzlement and bad governance, more revenue from the added value of copper, of lithium, or whatever, what’s going to happen? It’s more money for elites, more money to be embezzled, more money to enrich other people, and not more money to diversify the economy.
So at the end, yes, Xi Jinping’s rhetoric is, I mean, it’s not flowery. It’s really true. African resources should belong to Africans.
And for me, when I read, when I cut from that, it was like, which African country should think about the resource from the perspective of, like, what do I have to gain, and not use it as leverage from a geopolitical perspective, because he talked about it as well. So it’s something that we need, for me, when you say African resource to African, it’s that in, it’s in that perspective there.
ERIC OLANDER: Yeah, Cobus, how much of this, how much of this do you think plays into geopolitics? He mentioned geopolitics and that African countries should stay out of the geopolitical competition, implying the U.S. at the same time. One always has to think of everything through the lens of the U.S. China competition and, increasingly, the U.S. Europe and U.S. Japan competition as well.
I mean the China, Japan, China, Europe competition. How much do you think they’re saying this, that she is saying this, just as a way to position himself against the West and against the U.S. in particular, which has a very different approach to this? Remember, Donald Trump got up at the United Nations General Assembly and said, you know, the spoils go to the victor.
He literally said that. And I mean, he’s literally stealing oil from Venezuela and has talked about, you know, stealing Iranian oil and capturing Iranian oil. So how much do you think this is fitting into that narrative discourse?
COBUS VAN STADEN: Politically, I think Xi is picking up on how frustrated African countries and Global South countries are with that arrangement, you know. So I think it’s a political positioning. The question is whether it follows through on the business side. Picking up on what Gerard was discussing before, like I fully agree with what, what you were saying, but I think it was notable for me that this discussion came out in particular in the meeting with Botswana, simply because I think, as African countries go, Botswana has been relatively good, I think, at diversifying, trying to use some of these kinds of resources to diversify a little bit and build infrastructure and so on.
But also, I think Botswana has played a very important symbolic role in, you know, in the larger history of African countries taking control of the resources because they managed to get this unprecedented deal basically with De Beers to locate a lot of diamond processing in Botswana. And it’s now in the process of buying a large stake in De Beers as well. So for those of you who…
GERAUD NEEMA: Allow me to add to that point, because you mentioned the business is an interesting part, because it also speaks to the point I’ve made. In the case of Botswana, we all praise Botswana, but for many years, De Beers owned Botswana’s diamonds.
So Botswana was like, who owns the mine? What was more important? Like, what do we do with the money that’s coming out of the mine?
And this is a different story with Botswana, because Botswana was basically showing we don’t care if our flags don’t stand on the mining company; what we do care about is what we do with that money now. And of course, now they’re talking about diversification, because the diamond industry has been changing as well. So they want to buy more shares in De Beers, but also diversify.
That’s why they’re going to copper. And that’s why they’re going to China in that regard.
But just the case of Botswana that you mentioned really speaks to the point that, in the end, you don’t really care which flags stand on the mining company.
What really matters the most is the contract structure. It’s also about what you do with the money that you get from the mining industry.
COBUS VAN STADEN: Yes, that’s true. That’s a hundred percent true. But the one should also be clear about, you know, kind of about where Africa was coming from, right.
Kind of like in De Beers specifically for years and years when I was a child, right. Kind of like, it was literally, if you happen to, South Africa also has a lot of diamonds, right. Kind of, if you happen to dig a hole in your backyard and you found a diamond, you were literally advised to bury that diamond again, because all uncut diamonds in South Africa, whether known or not, whether underground or not, were owned by De Beers.
So legally owned by De Beers, the company, not even, not even the South African government, you know, and this was deep apartheid era, right. Kind of in that sense, like, you know, Africa’s economies have been messed up structurally around this kind of extractive industry for a very long time, right. And so in that sense, like kind of like making that, like, I agree with you on all of your points, but like making that, making that progress itself, it’s kind of, you know, like it carries a lot of this kind of historical baggage as well.
ERIC OLANDER: Yeah. The thing that caught my attention from these two meetings is that there is no other major power today, in 2026, that is welcoming African leaders to their capitals right now, in this moment right now. Whereas in Europe, everybody is focused on the Russia-Ukraine war, and obviously the Iran war in the United States, the midterm elections, and Trump is not the kind to welcome bilateral meetings with African leaders, right?
Even Japan, I mean, pick another major power. Japan isn’t doing a lot of bilaterals. And interestingly, if you take a country like Togo, we’ve talked about Botswana quite a bit.
Togo has, as far as I know- correct me if I’m wrong- no major natural resource reserves that it’s exporting to China. It has no real strategic value geographically for China. And yet it gets one of the senior leaders to come and have a face-to-face with Xi at a moment of incredible turbulence in the geopolitical system today.
And I just find that remarkable. And Geraud, you and I have talked about this on previous occasions as well, about why China succeeds in Africa where the other major powers don’t, and it’s because of this consistent, steady engagement at the highest levels. That you have meetings like this at a time when China is in the midst of- let’s just talk about what is going on right now- where the European Union and China are in very high-level talks to avert a trade war.
Obviously, the U.S. and China are constantly engaged with one another. Japan and China are escalating their tensions.
Xi could easily make the case that he is too busy to meet with the president of Botswana and a senior leader from Togo. Easy! And yet, here we have it.
GERAUD NEEMA: And that’s the point I wanted to make, as you presented so nicely, is the fact that in the midst of everything that’s happened on a global stage, a country like China is still showing you that, you know, I have the time to handle my own situation, my own crisis internally, my own geopolitical, because you beat countries, but I also want to communicate that I have the time for you as well.
I also have the time for a country like Togo. I also have time for a country like Botswana. I could leave Zhao Lijian; I could leave Wang Yi to handle that.
I could send Li Qiang to handle that. But still, I take my time: one hour to speak with you, to receive you, and to speak with you. And this is something powerful.
In terms of perception, it’s something like a P5 country. Today, France does that, but not as regularly. Not all the P5 countries do what China does in terms of regular encounter meetings with African officials.
And besides even that, let’s not talk about every other China-Africa conference event that happened since 2026 in China.
So when you put all that together, China can say, of all the P5 countries, of all the 10 top major countries in the world, no one can stand close to me and say, I do care about Africa more than China. Because I’m showing and I’m proving every day, I’m constantly at a higher level in engaging with Africa.
ERIC OLANDER: Woody Allen said 90% of success is just showing up.
COBUS VAN STADEN: Well, there’s that. But I think increasingly what’s also shown is that China is the only major power in the world with a truly global reach, or truly global focus, more specifically, who has the bandwidth to take in all of the complexity of what the world actually entails. Increasingly, I think the U.S. used to be that power, through very dense State Department networks and so on, but those, of course, have been dismantled.
So I think really China is emerging as really the only global power that has the capacity to be able to keep all of these different plates spinning around the world, I think.
GERAUD NEEMA: And Eric, allow me to add one last point because I can anticipate a comment saying, of course, China is doing that because Africa is important to China, because Africa is central to China. I’ll just give you a number. China-Africa trade is 5.48% of China’s trade in the world in 2025. So people, just keep your head straight. Don’t think that it’s… No, just to know where Africa stands in China’s relationship with the world.
You understand that despite that small, tiny place that we do occupy, China still makes it a point to say, I want to engage with Africa, just to put it out there before people say, you know, it’s because we are central to China.
ERIC OLANDER: Well, let’s quickly move on. We’ll have more on these visits, especially as we’re going to see these visits escalate and increase in frequency over the next year in the lead-up to next November’s Forum on China-Africa Cooperation (FOCAC) summit that’s going to take place.
Actually, we don’t know if it’s a summit. They haven’t told us if leaders are going to go, or if Xi will go. I suspect Xi is going to go because this is FOCAC 10, but we haven’t confirmed that yet.
So it could be a FOCAC conference or meeting or a summit, but we’re going to see this. And these visits are probably going to increase in frequency.
Now, one of the major vectors of China-Africa engagement is in the energy sector.
And to that end, we are thrilled to have a new report from none other than Cobus at your former, you know, stomping grounds at the South African Institute of International Affairs. I remember on this podcast, Cobus, for years we said, you know, South African Institute of International Affairs, but here you are back again, and you wrote a fascinating policy brief for them, Expanding China’s Role in Africa’s Electricity Integration. Go ahead and give us the highlights.
COBUS VAN STADEN: So this was trying to kind of position the role of China in the wider ambitions that Africa has for electricity. So a lot is happening in the African electricity field.
They have very ambitious plans to connect the entire continent into a single electricity grid and a single, not any single grid, but like an integrated grid and an electricity market.
And there’s already a lot of that running, like, you know, Africa has five, what they call power pools, which are kind of trans-frontier power connections between different countries, which allows them to trade electricity back and forth. So that’s already been happening for a long time. And particularly the Southern African one is particularly active.
And so there’s already a lot in there. And the Africans are now kind of working together to try and kind of like pull all of these different systems together and to kind of move towards a kind of an Africa 2.0, like integrated electricity market. And so the work of the paper was mostly looking at what role China’s playing in this.
So that role is, because China tends to deal with a lot of these countries bilaterally on these projects, you know, kind of China, the EU plays quite a large, like kind of organising role, like, you know, like policy aiding and organising kind of role on the political side. But on the actual project side, Chinese projects tend to be frequently negotiated country-to-country. So, but those are still, you know, kind of thanks to these connections, and some of these connections, these trans, transnational transmission lines, China’s also building.
So, you know, kind of between Ethiopia and various kinds of neighbouring countries, for example, you know, trading from the Grand Ethiopian Renaissance Dam, like hydroelectricity to other countries. So China’s building some of these large projects, and then also building some of the transmission networks. And so we were kind of like raising recommendations, you know, going to fall for African countries on how, on how they can kind of maximise this, this cooperation with China.
ERIC OLANDER: Can you walk us through those three recommendations that you provided?
COBUS VAN STADEN: Yeah, so a lot on the planning side. It’s picking up on some of what Geraud was mentioning also, you know, along this kind of, like, planning for industrialisation; it, you know, kind of, we were also calling for industrialisation plans and electricity plans to be dovetailed.
And for the two of them to be dovetailed in kind of strategic ways by being bundled into, for example, special economic zones, which China’s very into, which also because those also then kind of crowd in corporate kind of clients within or frequently offer kind of offtake agreements that can then fund some of this larger electrification. What we were also calling for is then the expansion of that into community electrification as well.
So, you know, it can’t be simply a kind of profit-driven kind of corporate thing, as the African states have already played a large role. The African states are big providers of social goods.
So they have to be, they have to kind of be pulled in there. There always has to be a community side there because otherwise you’re buying protests down the road, right? And so, you know, those have been our major kind of recommendations.
The other recommendation has been for African governments to be more cognizant of, more deeply embedded in new technologies that are coming out of China. So, you know, there’s a lot of, like, kind of cutting-edge electricity technologies coming out of China. China has, for example, as you know, in the kind of ultra-high voltage transmission lines that you need to transmit large amounts of electricity from, you know, like over several thousand kilometers.
No one has done that at the scale of China. And the South Africans have been shopping around for their own kind of electricity and industrialization in China recently. And they are planning to build 14,000 kilometers of transmission network.
And, you know, a lot of this is also aimed at selling electricity cross-border, right? Kind of as part of the Southern African power pool that already exists. So on that level, like it’s really important for African stakeholders to really be on the cutting edge of what China’s doing next.
You know, like where mass electricity, mass battery storage is going next, for example, and kind of be kind of like jump ahead, kind of like leapfrog ahead, you know, kind of and work with China on some of those technologies is another thing that we recommended.
GERAUD NEEMA: So Cobus, in your research, there’s one thing that, when you were speaking, just kind of I thought of something: which are, so far, the countries that you are, do you think that are really moving in the right direction in that given the recommendations you’ve given, which are these countries that are really more understanding, are better prepared to work with China, to take advantage of what China is offering or putting on the table?
COBUS VAN STADEN: The big one for me that I was referring back to a lot is Morocco. They are geographically located quite close to both Middle Eastern markets and European markets. So one can immediately see the commercial logic there, right?
But they have been very good at locating entire electricity value chains within Morocco rather than just importing components. And Egypt, another one that is doing well; I think South Africa has the potential to move in that direction after having been an electricity basket case for a long time.
The new plans are very interesting.
The main thing that we were also calling for is more cooperation between African countries for cross-border planning, like cross-border planning on industrialization, you know, kind of on the integration of electricity and industrialization in a cross-border context. And I think there’s a little bit of that happening in between Zimbabwe and South Africa, I think, and in parts of, you know, between Namibia, South Africa, Zimbabwe and Botswana. But it’s very, very early days, like, you know, kind of like that is really where there needs to be a lot more work.
ERIC OLANDER: Our old friend Jude Moore has been calling for this cross-border integration of the power systems for a long time. There hasn’t been much progress on it, and there certainly hasn’t been much progress in terms of working with China. So there are two challenges in doing this.
One, you have to get the countries to align on their agendas. Then you have to actually have a common negotiating position with the Chinese. Generally speaking, as far as I understand, the Chinese prefer to deal bilaterally rather than through clusters of countries.
Do you think there’s any possibility that that could change, that, say, SADC or the East African Community or ECOWAS as a bloc could negotiate a power infrastructure arrangement with the Chinese? Or is that ideal, aspirational, but not realistic?
COBUS VAN STADEN: Well, I think they can on the back of things that they’re already doing. So there is, you know, in West Africa, there is a project called Dorsale Nord that is integrating West African energy markets. They’ve now standardized payments; they’ve standardized a lot of tech specifications, and they’re planning to launch actual active day-ahead electricity markets, you know, where you can order a certain amount of electricity, and then it gets delivered to your system through this integrated network kind of 24 hours later; they’re planning to launch this year. So most of that work has already been done. So, you know, with these systems already running in Africa, like, you know, Chinese companies are very adaptable, right?
So once African governments have worked together to set the regulatory regime, and the systems are already operating, which, you know, in some cases they already are, that changes the game. And they, you know, Chinese companies simply have to adapt, you know, it doesn’t, it doesn’t then become a question of, oh, but people prefer bilaterals, who cares, right? Like, once Africa sets the, you know, kind of those terms, then kind of the partners will have to fall in line.
ERIC OLANDER: I think it can also work. I think it can also work if, for example, countries in the region like Saudi come up with a single, clearly commercial and viable energy project. When the Commissioner was talking, I was thinking of INGA 3 in the DLC.
A project that can really be a project that centralizes all projects in Southern Africa, really industrialize booming energy. But so far, the DLC has been playing a solo game on that, sometimes playing with South Africa, but you don’t have clarity; yet SADC needs to come up with a clear INGA 3 project with China and present the transmission line, presenting the economic, the economic advantage of doing that. If that was the case, I’m sure that China would not have left the INGA 3 project, but given how things are playing in the DRC, they just decided, you know, we’re going to step away from that project in the DRC because it’s too much conflict, too much mess.
ERIC OLANDER: Just in case people don’t know what the INGA3 project is, the INGA3 is putting a massive hydroelectric dam on the Congo River, which would generate more electricity than all of Southern Africa needs. It’s been a huge for the whole continent.
The scale of what INGA3 is, but again, the problem is, is the cost of doing it would be enormous, and the complexity of the project, because it’s done in the Congo, which makes it complicated by definition.
GERAUD NEEMA: And the ownership of it.
ERIC OLANDER: And the ownership, and so remember, it’s just been this dream for many, many years, but it’s never been able to get off the ground. I think there were Spanish consortiums involved, the Chinese were involved, so many have been involved, but the power capacity of what the Congo River can deliver to the entire continent.
And again, Giroud, your country is blessed with so much potential; it’s just mind-boggling what is there.
So very quickly, before we move on, I’m going to put a link to Cobus’ fantastic report. You have to read it to better understand where we are. And again, this is going to be very important in terms of the run-up to FOCAC. Energy is probably going to be a very popular discussion at FOCAC next year.
But I also want to kind of give a little bit of promotion to what we’re doing here at CGSP.
Coming out next month, we’re actually going to have a brand new report from our China-Africa fellow, Adjekai Adjei, who did a fantastic report. I mean, this is just amazing. Guys, I don’t even know if you’ve seen it.
Cobus, you’ve seen this, right?
COBUS VAN STADEN: I have; I worked on it.
ERIC OLANDER: You worked on it?
COBUS VAN STADEN: Yes, this report is groundbreaking.
No one has done this. As part of this work, when I was presenting this paper at a conference in Addis Ababa a few months ago, Adjikai was also invited, and she presented on this particular work. And you could like just see people perking up, like, no one has done this kind of like how-to guide on dealing with China at this level of granularity.
This is literally groundbreaking work.
ERIC OLANDER: We are printing it this week. We’re going to be heading to Nairobi, and we’re going to be distributing it in Nairobi. We’re going to have a whole series of engagements with Adjekai to promote it.
But you can see just from the layout, the explanation, the way that she, with your support, has arranged this is phenomenal. So I do want to draw everybody’s attention to that. We can’t share it quite yet, but it’s coming out very soon.
What we can share right now, though, is that we have a beautiful China-Africa energy map that is available right now at africanergy.chinaglobalsouth.com. Our colleague, Njenga Hakeenah, maintains this, and he’s working with a huge dataset, and we’re just about to update it right now. But if you want to see all of the different China-Africa energy engagements, and again, we’re going to update it in the next few weeks.
So there’ll be a lot more dots on this map. Go check out that interactive map that we’ve got there at africanergy.chinaglobalsouth.com.
So our last topic today is a topic that we find near and dear to our hearts, and it’s talking about the debt trap.
Listen, this is a topic that has been going on for years, and there’s been some evolution in it over the years that, well, Kobus, I wouldn’t say there’s been an evolution in it. For the most part, people are still surprisingly loyal to it. It’s just really amazing how this thing just refuses to die.
Nonetheless, I did want to draw your attention to a streamer by the name of Upton, and he’s a former CNBC and MTV journalist. He does quite a bit of really good stuff, and he’s done a clip on the China-Africa debt trap, and I’ll show it to you very quickly here, and we’re going to play a clip for you on it. And he puts it; he says, listen, the debt trap, the China debt trap, was never real.
Here’s what’s actually happening. Let’s play a clip from this, and then I’d like to get your reaction to it.
SOUNDBITE: Just to keep saying the China debt trap, but I think that’s flipping, and to figure out why, you have to go back to why the lending happened in the first place and why the lending actually stopped or at least slowed down.
See, 2016 was the peak. Chinese state-backed lending to Africa hit roughly $29 billion that year.
More than every Western creditor combined. Through the early 2010s, China was growing at nearly 10% a year, and it was sitting on trillions in foreign reserves and riding one of the biggest commodity booms in centuries. Cheap money at home, hungry demand for oil and copper abroad, and a brand new foreign policy banner, which was called the Belt and Road Initiative.
So lending that much money to that many countries made sense as long as growth stayed high and commodity prices stayed up. But then both of those things reversed. Commodity prices fell, China’s own domestic growth started slowing, and the loans that got signed during the boom still had to get repaid on schedule regardless of how the borrower’s economy was doing, obviously.
That’s the mechanism behind the flip. So Zambia defaulted, Ghana defaulted, Ethiopia came close. So realistically, China cannot call in these loans without actually collapsing the same very countries that it depends on for growth, for minerals, for influence.
China’s local governments are carrying somewhere between $8 and $10 trillion in hidden debt built up through borrowing that’s tied to land sales that dried up when the property market collapsed. The IMF has even flagged this as a serious risk to China’s own financial system. So when your own banks are nursing a multi-trillion dollar hole, picking a fight over a Zambian copper mine and triggering a messy international default stops looking like a priority.
So what happens next?
Well, instead of pushing for repayment, Beijing keeps extending the timeline and renegotiating, acting like the crisis isn’t really a crisis.
ERIC OLANDER: Okay, so a couple of points to fact-check. Number one, he makes allusions to the defaults in Zambia, Ghana, and Ethiopia. All of those defaults were because of Eurobond debt, not because of Chinese debt.
Zambia missed a $42 million coupon payment. Ghana also fell behind on its Eurobond payments. And by the way, that is the same in Sri Lanka as well.
He also, at the beginning of the video, mistakenly says that the Port of Mombasa in Kenya was collateral for the Standard Gauge Railway loans from the China Exim Bank. That is 100% untrue. It was revenue from the port that was collateral.
And so that’s a very important distinction to make. However, gentlemen, and this is what I want to get your take on, I thought this was an interesting clip. First of all, it’s got about 170,000 views, and it’s probably going to go up.
It was a more nuanced take on the debt trap narrative. I thought the clip that we heard, again, is not part of the rhetoric that we’ve heard coming out of influencers and the media in the West. And I thought it gave a slightly different take on this.
Cobus, you follow media narratives quite closely. What was your impression from this clip?
COBUS VAN STADEN: It was kind of a mixed reaction. In some ways, I was glad he complicated the question. He clearly picked up on some of the debunkings that we’ve also featured.
So I was glad for that. But I think what bugged me a little bit about it was, in the end, the way that, for commentators on these issues, and particularly in the Anglosphere- these being Western commentators- it’s revealing for me how this discussion can only ever be about China. He makes the point, which we’ve also made, that China only owns about 8–9% of Africa’s total debt.
And then goes on to say, oh, but they own 40% of bilateral debt. And that’s actually the important thing, because that buys political leverage. You think the IMF and the World Bank don’t have political leverage over Africa?
ERIC OLANDER: But also, you brought up a good point here, and I’m sorry to interrupt you, but Africans do not do much bilateral borrowing. And so China is disproportionately high. When you see where Africans borrow most of their money from, this completely thwarts the rhetoric.
Most African debt is borrowed from Africans. It’s domestic borrowing. It’s not foreign borrowing.
GERAUD NEEMA: I wanted to make that point, because unlike Eric, I was like, this is a fake nuance speech. It’s just like…
ERIC OLANDER: I thought there was nuance, but I’m glad you disagree.
GERAUD NEEMA: For me, it was like, let’s find a narrative. Since we cannot sell the debt trap narrative, let’s find another narrative that still blames China for one part, for the biggest part of China that Africa’s debt has. And for me, that was the narrative of it.
Because when you look at a different point of fact he used, he used the DRC case for Sicomines. And it’s always the way to frame the question, always to frame it as that is the central point. It’s like, no, that’s not the central point.
For Angola, same thing, central point. That’s not the central point. You also go, when he finally landed on the bilateral debt, he’s like, my friend, as you mentioned yourself, look at the share of bilateral debt to Africa, of the whole debt.
You’re going to realize that it’s nothing close to what Africa is into: multilateral, private lending, and all of that- nothing to do with China. But in the end, he really tried to kind of nuance it; it’s not the debt trap narrative, it’s something else. But in the end, for me, it was like, only the same narrative, how to say that China is the main responsible party for Africa’s debt issue without saying that we’re going to use a different shape and form.
That was like, this is fake nuance. This is fake nuance, because if you have to be straightforward, you have to put things in context. Yes, China owned 40% of African bilateral debt.
And then bilateral debt represents less than 12% of Africa’s total debt. That’s the truth. And then people say, ah, okay, actually, the fact that China owns 40%, is nothing.
It’s not a big issue here. But for me, the whole framing of it was kind of nuanced, but a fake nuance for me, given the high presented fact.
COBUS VAN STADEN: Yeah, like this, you know, kind of this is so frequently, like, you get the feeling that there would be no, you know, there would be no reason for a lot of these commentators to talk about African debt at all, if there wasn’t a China connection, right?
Because if you talk about African debt in a real way, you have to acknowledge the, like, Africa’s entire, the entire mess of Africa’s, you know, kind of like, has grown out of Africa’s relationship to Western power, right? And, you know, kind of that structured the entire, the entire kind of situation that China then stepped into as a latecomer, right?
And I have the same, the same problem with you, like, as you did, you know, kind of mentioning the Angolan model, you know, like, those, those are old AF, you know, kind of, they’re decades old now. And also, those were the crazy experiment outliers, you know, kind of, those were the things that they were trying when they had no idea what was going on in Africa. So but they still use as emblematic somehow of China’s entire kind of presence in Africa, you know, so that’s, that’s…
ERIC OLANDER: Yeah, Gérard, I thought you were going to say something else on the Sicomines, because what I think was problematic in his inclusion of Sicomines is, Sicomines was not a loan. So, and that is very important, is that Sicomines was the creation of a joint venture between Gécamines and a consortium of Chinese companies. And yet he folded that into a conversation about Chinese loans.
I also want to find it. Yeah, I say, yeah, the way the concept was implemented, like, this even another debate is not really unpack it fairly. I’m like, all of that for me was like, No, my friend, yeah, you’re just picking some topic; you’re not even framing it correctly.
And you’re putting them in a whole package of, like, China debt and financing in Africa is problematic somehow.
ERIC OLANDER: Yeah. So to Cobus’ point, when you look at the Chinese in isolation from the other creditors, you miss some very important context.
And I want to point out research that’s been consistently done over the past decade by Debt Justice, which is a UK NGO. And they have consistently found that Chinese debt, problematic as it is, has been an issue in terms of the transparency of Chinese loans, which, by the way, African governments hold a lot of accountability for the lack of transparency in Chinese debt; they do not have to agree to the nondisclosure agreements. If the Zambian government or the Kenyan government said, Nope, our laws require us to make all of our contracts transparent, either the Chinese would agree, or they would walk away.
But at the end of the day, governance in Africa is also a part of this. But one of the important things that I want to bring your attention to is that Debt Justice has pointed out that African repayments- and that’s really in many ways the most important factor here is how much money actually goes out the door, are three times higher to bondholders and into Frankfurt, London, and New York than they are on interest payments to the Chinese on Chinese debt. And also when it comes to restructuring, which is something that Upton talked about, the Chinese have been far more flexible on restructuring loans than the bondholders have.
In fact, in Zambia, one of the biggest, you know, impediments was that the bondholders couldn’t agree on a debt restructuring deal, in part because they didn’t see transparency with the Chinese. But at the same time, the bondholders have been very, very difficult to deal with. And Cobus, you’ve made this point over the years, when we’ve talked about this, that there have been no efforts by UK, U.S., or EU regulators to make it easier for bondholders to renegotiate these debts.
And so when everybody puts the microscope on the Chinese, but never on the bondholders, it’s missing important context. Go ahead, Cobus.
COBUS VAN STADEN: Because, you know, there’s an even messier situation, right? Because the bondholders are not this kind of like small and limited group, right? They end up – there are a lot of pension funds and so on, you know, involved in this.
So one has to, at some stage, if you’re going to be talking about African debt and African financial problems in real terms, you have to at some stage come to the logical and necessary conclusion that a sweet, retired, like librarian in Michigan is somehow through complicated ways involved in an ongoing debt crisis that is sucking resources and the very future out of the continent, right?
That is unfortunately the kind of level of complexity that one has to get to, right? But no one wants to talk about that. Everyone wants to talk about China.
GERAUD NEEMA: And Eric, allow me to point out one thing that we kind of take it for granted that to be the case, but that’s not really the case. In the clause that people like to use, where China talks about confidentiality in this agreement, those clauses that do not cover legal demands from their own governments for transparency, those clauses are directed to outside third parties who want to know what the agreement is about. And it’s really fascinating because when we read those clauses, we say, no, no, China says that you cannot disclose that.
Actually, if it’s a legal requirement, a country’s government can disclose those agreements to the only legislative body, to their own institutions, but they do not do that. But sometimes African leaders take it as an excuse to justify why they don’t want to abide by their own rules and regulations. When you ask the Chinese, they tell you, no, no, these clauses are only for, like, a third party.
That’s not your country. That’s part of the, you know what? We want to know, Kenya, tell me what you negotiated with China on that day?
This is where the clause is applicable. And even there, it’s not about forbidding; it’s just like, let China know that we are going to disclose this term, et cetera, et cetera, to the third parties. And sometimes we just take it like, you know, China doesn’t want you and countries like, yeah, we’re going to hide behind this clause to justify our secrecy beyond what we agreed on in these loans.
ERIC OLANDER: And one of the things that we’ve brought up over the years in our conversations with Professor Deborah Bräutigam at Johns Hopkins University or Huang Yifan, who is also one of the leading China debt scholars, is that to present China as some type of extreme outlier when it comes to the nondisclosure agreements is actually not accurate. The research that they’ve done over the years is that there’s a lot of opacity in European and German debt and others as well. China is definitely on the spectrum of extreme, maybe, but it is not an outlier.
And I think that’s another missing piece of context in this: NDAs, which in these contracts, typically follow Swiss corporate law. These NDAs are quite standard in a lot of these contracts. And we’ve actually, over the years, we’ve said this as well, go and find me a concessional loan contract from the French Development Agency.
I challenge anybody to do it. I challenge anybody to do it. Go find them for me.
COBUS VAN STADEN: Remember, we interviewed Brad Parks from AIDDATA, you know, kind of, and he was saying that, you know, they do this forensic work to kind of like to get to these loan contracts. And he was saying that you use the same exact forensic techniques to get to US loans as well, you know, loan contracts as well.
GERAUD NEEMA: Eric, allow me just to read you because that’s SGR confidential agreement, just like, allow me to read you what the text is saying. The last part: the borrower shall not disclose any information hereunder or in connection with this agreement to any third party unless required by applicable law.
ERIC OLANDER: But this is what makes me so angry, Giroud, is that we only focus on the Chinese side. And where is the Kenyan side? And let’s put this right at the feet of President William Ruto, who came to power on a platform during his campaign that he was going to release the Standard Gauge contract, Standard Gauge railway contracts. And he was ordered by the High Court of Mombasa to do so and did not do so.
So this is the same across the continent: if you said, listen, it’s our laws that we have to publish these contracts, which in many African countries, it is their law to do that. And yet they don’t do it. So as much of the blame needs to be put on the Chinese side, there also needs to be accountability on the African side.
GERAUD NEEMA: On that confidentiality note, I’m sorry, on that confidentiality, it’s clear, unless required by applicable law. So basically, no one can go and say, I’m not disclosing the information of this contract because there is a confidentiality clause in the contract.
No, the confidentiality clause is telling you to disclose it unless required by applicable law.
So if your contract tells you you have to disclose this information, disclose it. Don’t hide behind me.
Don’t come behind it and say, you know, the Chinese don’t want us to disclose that. That’s not true. You don’t want that.
ERIC OLANDER: That’s the argument. That is precisely the argument that the Kenyan government said on national-security grounds, that this was a government-to-government contract between the China Exim Bank and the Kenya Railway Authority. And therefore, because it was a national agreement, it had national security concerns, and they couldn’t release the contracts. That was the state’s excuse.
GERAUD NEEMA: They’re lying. I’m sorry, but they’re lying.
ERIC OLANDER: But again, that is not included in these discussions. Cobus’ point is that, OK, so this might have been a partial evolution of the narrative.
But to both of you, you think that we’re still grounded in the traditional debt trap narrative.
COBUS VAN STADEN: I think that we’re grounded in a larger problem, which is just a complete, like, kind of like inability to face the kind of larger mess we’re in in developing finance, you know, kind of. And also, you know, kind of with that, the assumption that the work of developing countries is to suffer. Right.
Like if Africa isn’t suffering, they’re not doing their work. Right. Kind of.
That’s the logic in the U.S. frequently around this discussion. Right. And so, therefore, you know, kind of there is this palpable disinterest in whatever the realities in Africa are and this tunnel vision on what China is doing.
And everything has to be turned into a China narrative no matter what.
ERIC OLANDER: Well, I’ll put a link to Upton’s video in the show notes. He’s got a series that he’s doing on China and Latin America and China in the Middle East. So you’ll have to join our China Global South podcast to see if we talk about that.
But I don’t think so. I think one’s enough for now. But nonetheless, we’d love to hear your comments on whether or not you think Upton’s video moves the dialogue forward or, as Cobus and Geraud say, it’s basically just a rehash of the same old debt-trap narrative that we’ve heard for so long and missing a lot of very important context.
And there are some factual problems with it. So next, if Upton’s listening or watching this next time, you should reach out to us. We’d be happy to chat with you in advance.
So let’s leave the conversation there, guys. We’re going to put all of the materials that we talked about today in the show notes. Lots of great stuff that we’re going to be doing there.
Also, just want to let you know, we have got a very, very busy next few months ahead. Heads up to everybody. If you’re in Nairobi, Kenya, around the first week of November, Geraud, myself, Cobus, and Lucy, we’re going to have a big team there. Njenga is going to be there.
We’re going to be putting on a conference with the Wits University School of Journalism. And at the same time, we’re going to be making the rounds as we do when we go around the world.
So if you would like to meet up and get together, let us know. We have a lot of extra time in our schedule. Send me an email at [email protected]. And if we have time available, we’d love to get together. And I think we’re going to talk about doing a meetup as well, maybe just at a coffee shop or a bar, and just to see if anybody wants to come out. So we’ll put an announcement on that in next week’s show.
So that’s it for this edition for Geraud in Mauritius and Cobus in Johannesburg. I’m Eric Olander.
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