Africa boasts abundant renewable energy resources, including sunlight, wind, hydro, and geothermal potential. These resources can play a vital role in both Africa’s sustainable development and the global transition to a low-carbon future. However, financial constraints and underinvestment have prevented many African countries from fully harnessing their renewable energy potential. African countries’ Nationally Determined Contributions (NDCs) between 2020 and 2030 demand an estimated US$2.8 trillion, surpassing 93% of Africa’s collective GDP. Despite governments pledging roughly 10% of this sum, there remains a significant funding gap, particularly in sectors like energy and transport. Chinese investors can bridge this gap by providing crucial funding, technology, and expertise to help African nations maximise their renewable energy potential.  

The Renewable Energy Briefing, titled “Green Horizons in 2024: Exploring Africa’s Renewable Energy Potential for Chinese Investors” has identified Zambia, Mozambique, Democratic Republic of Congo, Angola, and Uganda as the top five priority investment destinations for Chinese investors in Africa. It provides a data-driven analysis of each country’s renewable energy potential, regulatory landscape, existing infrastructure, and investment opportunities. Additionally, the briefing highlights the crucial role that Chinese companies can play in Africa’s renewable energy transition and will offer strategic recommendations for further investment.  

The selection of the top five countries was based on seven key criteria, including Total Climate Finance (TCF), Electricity Access (EA), Chinese Foreign Direct Investments (CFDI), Renewable Energy Capacity (2022), Deployment of Policies (DOP), Percentage of Renewable Energy Source (RES) in Total Electricity Generated, and Renewable Energy Potential (REP). These criteria were divided into two categories: those showcasing a need for investment and those highlighting potential, opportunities, capacity, and strong relationship with China.  

 Identified top five priority investment destinations 

The Renewable Energy Briefing aims to equip Chinese investors with the essential insights needed to navigate the renewable energy markets of these top-tier destinations successfully. By providing detailed and tailored investor briefings for each country, Development Reimagined is ensuring that Chinese investors have the information they need to make well-informed and successful investments in Africa’s green energy sector. 

For the next step, DR is planning to organise an investment tour in some of  the identified countries in September 2024. The tour will aim not only to visit the sites for potential investment opportunities but also to stir dialogue and brainstorm practical partnerships with African business leaders and government officials to deliver on renewable energy. 

Unlocking Renewable Energy Potential in Africa (2024): Who are Africa’s top 5 destinations for Chinese renewable investment? Find our briefs below.

Get access to our Introduction and Methodology here

Our Angola investment brief here

Our DRC investment brief here

Our Mozambique investment brief here

Our Uganda investment brief here

Our Zambia investment brief here

For more information about the Renewable Energy Briefing, please contact Climate Program Manager Ms. Yike FU at yikefu@developmentreimagined.com .  

29th February, 2024  

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FULL SPEECH BELOW

Thank you very much Vice President Yu Zirong, distinguished guests, and colleagues in the international development community, good morning!

Firstly, I would like to extend our heartfelt gratitude to the Chinese Academy of International Trade and Economic Cooperation (CAITEC) for extending this gracious invitation to Development Reimagined to join this thematic session.

For Development Reimagined, as an African-led, independent international development consultancy, working on cutting-edge development issues, especially in China-Africa cooperation, it is great to see that as a major creditor in Africa, attention has been raised from China to look at different options in debt reorganisation, including debt-for-development swaps that we are discussing today and I would like to share an African perspective on exploring the potential of this instrument.

Throughout the COVID-19 pandemic to the present, there has been an abundance of headlines about how the ability of African countries to service debts has been undermined and that there is a mounting debt crisis in Africa. Such narratives leave the false impression that African countries have been spending loans badly and neglected their imperative to access financing to fill their infrastructure and other spending gaps. We’ve also seen the limited effectiveness of previous instruments, for example, the G20’s Debt Service Suspension Initiative (DSSI) and then the Common Framework, as already mentioned by Mr Zhou Xuwen.

Our research on development finance has argued that the International Finance System (IFS) needs to be reimagined and redesigned to centre borrowers, providing significantly more fair and concessional finance, especially for low-income countries to fund their growth and achieve the UN Sustainable Development Goals (SDGs).

Also, to put it simply – for African countries, fast, unconditional debt relief alongside fast access to new concessional finance is what they are in dire need of when seeking debt relief. Therefore, when we are making new proposals to innovate the debt system, if we are not just thinking about how easy or plausible it is for creditors and really taking the borrowers and their long-term development into account, these proposals need to be assessed against these criteria. 

Under such context, the question of what makes debt-for-development swaps a good alternative for China and its African debtors – is clear.

The African debtors may be able to access more flexible financial arrangements with China and can negotiate on the concessional terms, the design of specific development programs, and possibly the use of other supplemental financing instruments. We know that under the presence of constant and sometimes uncertain obligations to make debt repayments, these African governments were prevented from further investing in critical sectors like climate, health and education, the debt swap targeted at these sectors resolved their budget shortfalls. It represents a positive sign of moving away from the traps in the existing deadlocks with debt restructuring and a driving force to continue the progress with SDG commitments that are otherwise often underfunded.

For China, an option aligns with the commitment to support Africa on the governance of debt and other issues such as climate, health, and education, for which the debt-for-development swaps are best known and also included in the Forum on China-Africa Cooperation (FOCAC) Dakar Action Plan. It helps refute the speculative criticisms around the “debt trap” narrative.

In addition, members of the Paris Club are only allowed to consent to debt swaps if the “IMF positively assesses that the debtor country’s debt restructuring program helps stabilize international trade relations,” and this rule has made it difficult for the Paris Club countries to engage in debt swaps with their borrowers. As a non-Paris Club major lender, China and African borrowers would not be constrained by such rules and could take the initiative in formulating creative solutions. By taking it to the next level, China and Africa together can have the capacity to leverage more international finance institutions to follow the lead.

Despite these benefits, there are also several drawbacks that we need to be aware of:

As the presentation by Ms Sun Tianshu already raised – The amount subjected to debt-for-development swaps is often too small to reduce the debt burden or improve the creditworthiness. For example, a 2021 debt-for-nature swap in Belize offered it debt relief worth 12 per cent of its GDP, but this was only a small dent in the 125 per cent that its total debt amounted to at the time. The lack of large-scale debt-for-development swaps also makes the ability to have a sustained impact on the recipient questionable.

Another fundamental disadvantage of debt swaps is that the additional fiscal space created from debt relief will usually materialize within an extended period of time (ranging from several years to even decades). On the contrary, debt service payments can be due much earlier. Put differently, in many instances, there is not enough time for a borrower to increase its fiscal spending in core sectors (such as education and health) since its ongoing debt service commitments may result in a myopic (or shortsighted) treatment of the additional fiscal space created. This comes to the issue of how to maintain a balance between repaying debts and investing in sustainable development projects.

Furthermore, the issue of fungibility on behalf of the debtors often leads creditor countries to exercise strict control over how funds from debt swaps are allocated and used by the recipient country. Previous practices, especially those led by Global North countries, tend to be further complicated with the conditionalities in terms of how funds generated from the debt swaps should be spent.

Lastly, as we are all aware of, and why we are making this pioneering discussion here today, the limited application and lack of experience add to the administrative costs compared to simple debt cancellation, and additional challenges in project selection and implementation, as well as robust monitoring mechanisms to ensure the accountability and transparency.

The debt-for-development swap, as an option, awaits further policy guidance and implementation. There is certainly a great deal of work to do and hereby, we make several recommendations for China and the African partners to explore the potential:

Firstly, even if the amount is relatively small, they are still meaningful financing if it can be strategically channeled into programs that are designed to generate long-term productivity and address issues of economic vulnerability. I would also like to point out that while at the current stage, debt-for-development swaps are best known for their application in sectors like environment, health, and education, the scope could also be expanded, for instance, into agriculture. Just to give a quick example – the 3rd phase of the $100 million debt swap program between Egypt and Italy includes include the establishment of Field Silos and Information Technology System for a Wheat Management project. 

When it comes to sovereignty concerns as well as the on-ground implementation, several African institutions can serve as ideal third parties for China and African borrowers to manage and advise on the effective use of debt swaps, providing expertise, oversight, and guidance to ensure that the swaps align with the developmental goals of the participating countries. These partners include the African Development Bank (AfDB), the UN Economic Commission for Africa (UNECA), the African Institute for Economic Development and Planning (IDEP) and regional economic communities. It is also critical for African countries to exercise agency and be the promoters themselves to propose development programs suitable for debt swaps and with specific guidelines provided to the Chinese counterparts.

A common practice is for the debtor to transfer the equivalent in local currency of debt cancelled to an established international trust fund, such as to support the projects in the debtor country. There are previous cases of sector-targeted funds between AfDB and other partners, like the Health in Africa Fund, and Africa Climate Change Fund; which is also why I raised the role African DF institutions can play. Back in 2014, the PBoC and AfDB established the co-financed Africa Growing Together Fund to sponsor projects over the next ten years. We recommend the replenishment of that fund is worth considering if we are looking for channels to utilize the debt-for-development swaps, especially since there is already a certain level of inter-ministerial coordination in place to facilitate the process.

Considered from a borrowers’ perspective, since debt swaps have been typically negotiated on a bilateral basis, and individual borrowers do not possess significant bargaining power. There is the opportunity to consider multilateral debt swaps for a targeted development sector that is a shared priority by several countries. Arguably more complex negotiations and transaction costs at the beginning, but in the long-term a multilateral mechanism mitigates the risks for the creditor and contributes to consistency and better coordination, as well as additional fund sources to support cross-border and regional projects.

I would also like to mention that since debt cancellation applies only to countries in severe debt crises, and the amount of debt-for-development swaps is small, China could consider extending the eligibility of debt swaps to include borrowers experiencing less severe debt stress, in exchange for commitments such as in nature-positive investment, which aligned with the FOCAC commitments to step up support in those sectors – Egypt could be a good case.

In response to the question of is debt-for-development swaps a silver bullet? We are aware that it does not address the root causes of debt distress, and we need to bear in mind that it’s a stand-alone approach; more systematic reform is needed in the debt system, as well as supplement with other instruments in the policy, such as a rethinking of the debt sustainability assessment facilitating the reallocation of Special Drawing Rights (SDRs).

With all that being said, when the incentives to promote and the mechanism to implement are well-understood and well-designed, the debt-for-development swaps are a valuable and viable instrument that with suggested modifications come from diverse stakeholders based on previous experiences, can simultaneously contribute to the relief of debt distress, while supporting the long-term social and economic development in Africa.

As for China, by embracing this new solution, can demonstrate commitment and leadership in addressing the interlinked challenges of debt and the lack of progress in achieving SDGs, thereby contributing to a more resilient post-pandemic recovery for Africa and for the Global South as a whole.

For Development Reimagined, we are looking forward to supporting with an understanding of the debt situation in Africa and facilitating the negotiations and designing of governance architecture for debt-for-development swap as a new instrument.

Thank you very much!

December 2023

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The UNAIDS Report revealed that:

1. Seven African countries have achieved the 95-95-95 targets – that is, 95% of people living with HIV know their status, 95% of those aware of their status receive life-saving antiretroviral treatment, and 95% of those on treatment attain suppressed viral loads. These countries are Eswatini, Namibia, Rwanda, Tanzania, Zimbabwe, Botswana, and Sao Tome and Principe.
2. Eight other African countries are on their way to meeting these targets.

This is remarkable progress, given that HIV/AIDS had ravaged the continent and that data showed Africa had the highest number of infections in the early 2000s; it was also the leading cause of death in Africa. Progress has also been witnessed in the: – new HIV infections that fell by 37%, HIV-related deaths fell by 45%, and 13.6 million lives were saved due to Antiretroviral therapy (ART). There has also been significant progress in ART coverage, with considerable expansion between 2012 and 2022. The transmission cases were few in 2020 for two reasons: COVID-19 restricted movement but most importantly, ART coverage has greatly improved over the years.

Despite this progress, it is not the time to lower our guard – although again, we are not sounding the alarm!

The goal is to eradicate HIV/AIDS by the year 2030 under SDG 3 but this requires financing. Data reveals that funding for HIV/AIDS was significantly reduced in 2021. Data also shows that the funding was decreased due to countries’ little fiscal space during COVID-19 as finances were redirected to other sectors and the fight against the pandemic. Now, LMIC, including Africa, need US$ 29 billion per year to meet the SGD 3 goal of eradicating HIV/AIDS by the year 2030. Notably, fully financing the fight against HIV/AIDS will lead to a reduction of infections by 40-90% per year.

Local manufacturing has played a significant role in fighting HIV/AIDS in Africa. African countries such as Ethiopia, Kenya, South Africa, Tanzania, Uganda and Zimbabwe manufacture ART drugs locally. But data reveals that local production does not meet local needs.

So, what do we propose?

While HIV/AIDS funding for access to drugs is essential, we propose that external funding be directed to local manufacturing. External funders must work hand in hand with existing local manufacturers to help them grow rather than crowd them out, to contribute to Africa’s health sovereignty journey.

Two, funding should focus on prevention, in a bid to ensure funding does not stop. Prevention includes areas such as: – maternal health, pre-exposure prophylaxis (PrEP) and post-exposure prophylaxis (PEP). Funding prevention will drastically reduce the number of new infections.

Again, we are not sounding the alarm; we are tracking progress, but this progress is not without shortcomings. So, on this World AIDS Day – as Africa continues with its ascent in the fight against HIV/AIDS – we propose funding be directed to local manufacturing and prevention.

Check out our infographic below to understand the data yourself!

To find out how Development Reimagined can support you, your organisation, or Government, please email the team at clients@developmentreimagined.com.

Special thanks go to Ivory Kairo and Rugare Mukaganga for their work on the graphics collecting/analysing the underlying data and this accompanying article.

The data was collated primarily from a range of sources, including the abovementioned UNAIDS report and World Bank data.

If you spot any gaps or have any enquiries, please send your feedback to us at media@developmentreimagined.com, and we will aim to respond ASAP.

December 2023

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Less than six months later, however, on 1^st  November, the US announced a plan to delist Gabon, Niger, Uganda, and Central African Republic (CAR) from a special trade scheme it has with up to 35 African countries known as the Africa Growth and Opportunity Act (AGOA). The announcement came a day to the start of the 2023 AGOA forum in South Africa, designed to discuss a potential renewal to AGOA from 2025 onwards. By blacklisting these countries the US was itself using AGOA as a stick, a tool of economic coercion to achieve political objectives. The problem is, not only was this hypocritical but AGOA has never been a big enough economic carrot. Both these factors – if not addressed – pose major challenges to US foreign policy going forwards.

AGOA has grown limited African exports

Since its inception in 2000, the innovative trade scheme AGOA has offered preferential market access opportunity for eligible African countries, and for an extensive range of products including manufactured items, not just commodities. For these reasons, and especially prior to the introduction of the African Continental Free Trade Area (AfCFTA), it is an excellent scheme in principle, and can even be seen as a model for other development partners.

However, for various reasons, two decades later, much of AGOA’s success has been concentrated in a few countries and a few industries and sectors.  For instance Kenya and Lesotho boasts some of the highest AGOA utilization rates: the share of their exports to the U.S. that qualify for zero-tariff treatment is 88 per cent for Kenya, and as high as 99 per cent for Lesotho. However, both nations’ exports to the U.S. were mostly apparel items. Conversely, over the same period nearly half of all beneficiary countries have a utilization rate of 2% or lower, implying that 98 percent of U.S. imports from such countries were subject to US tariffs. As a result of this, for instance, a model designed by an economist to predict the impact of AGOA not being renewed for South Africa or South Africa losing AGOA benefits (for example due to blacklisting) suggests that at worst, South Africa’s total exports to the US would fall by about 2.7%. “In aggregate, a loss of AGOA would lead to a decline in SA’s GDP of just 0.06%.” This remarkably small effect is ascribed to two factors — “the nominally higher tariffs on SA exports to the US and the composition of SA’s export basket.”

This challenge has borne out in reality, for instance in Ethiopia, a country that the US blacklisted from AGOA in 2021 due to “gross violations of internationally recognized human rights.” In 2021, 93.1 per cent of all apparel from AGOA countries entered under the AGOA programme. That figure dropped to 68.3 per cent in 2022 due to Ethiopia’s exports entering the US outside of the AGOA programme. This means that Ethiopian goods had strong demand even without preferential treatment. There is no doubt that Ethiopia is better inside AGOA than out, but the competitiveness of its exports meant being cut off from AGOA was a pinch not a punch.

Perhaps most damming, figures show that AGOA has made little in-roads in expanding the market in absolute or relative terms for African countries in the US since its inception.  African exports to the US as a percentage of overall US imports have declined from 2.27 per cent in 2000 to 1.06% per cent as of 2022. The fact is, Africa’s trade with China, the EU and India have all eclipsed US–Africa trade since then.

AGOA as a tool of coercion

However, while the carrot of the AGOA has hardly grown, the intentional use of AGOA as a tool of coercion (effective or not) has grown. Since the inception of AGOA, 18 countries have at some point been delisted from by the U.S. starting in 2003 when the Central African Republic and Eritrea were removed. There are instances where a country loses and regains its eligibility like Madagascar which was delisted in 2010 and regained its eligibility in 2015.

Certainly, Washington sees the recent a spate of coups in West and Central Africa, as well as Africa’s growing political and economic ties with Russia and China as a threat to its influence on the continent.  However, blacklisting is a poor means to gain back that influence because trade is too small.

Moreover, although the four criteria for blacklisting African countries from AGOA is transparently written into US legislation, their application has been highly inconsistent. For instance, while Mali and Guinea or Burkina Faso are now ineligible for AGOA on the grounds of being military governments, Chad maintains eligibility while having a military government in place. Hence, the concern that AGOA is being used politically for coercion, rather than the simple application of US multilateral principles.

Furthermore, countries like Mali, Burkina Faso, CAR are making aren’t just undergoing political transitions, they are making profound geopolitical reconfigurations. They do not view themselves as allies of the United States and are not major beneficiaries of AGOA. Gabon, for instance, has a significant trade deficit with the United States of US$87 million in 2022, with the majority of Gabon’s exports to the US being commodities comprised mainly of manganese ore, and refined petroleum. In turn, US exports consisted of poultry meat and excavation machinery. Similarly, Guinea exported $8.49million worth of goods to the US while the US exported US$134 million to Guinea. It therefore comes as no surprise that these countries, and others such as Mali – having been delisted over a year ago – has not made any reported effort to be reenlisted. if anything, the Junta in Bamako has pressed on with power consolidation, and with enhancing bilateral relations with Russia.

US-Africa trade has declined as Africa’s trade with others soar

The fact is, while US exporters and private sector players have found new markets in the continent, data from Statista shows that US exports of trade goods to Africa has nearly tripled from $10.97 billion in 2000 to $30.69 billion in 2022, however, trade volumes in the opposite direction and under AGOA have never grown large enough to matter to many African countries. Too little effort has been put into making the carrot grow.

This will become an even stickier challenge for the US especially as the same goods are increasingly finding markets in other countries, including emerging economies such as China, perceived to be a US rival.

For instance, in 2021, CAR imported goods valued at US$23 million from the United States, while exporting goods of just US$881 thousand to the US, a massive deficit. In contrast, CAR exported US$31 million worth of goods to China, even though the majority of said value is from oil and commodities. However, countries such as China, India and Brazil are all starting to make more targeted efforts to open their markets to African products, not just altruistically as a development tool, but also as a means of diversification of their own supply chains. 

The coming into force and operationalization of the AfCFTA, with its goals for regional integration, will also create larger markets for African countries internally, again, dampening the impact of any US preferences or delisting.

That is, unless the US makes major changes to how it sees and uses AGOA, quickly.

A renewed AGOA

As the US and G7 partners have themselves realized, and spoken out against, using trade as a coercive tool is harmful to foreign policy and multilateralism. It also creates uncertainty for the domestic and international private sector – witness the exit of US firms from Ethiopia in 2021. Indeed, a sound trade policy should facilitate the achievement of both economic and strategic goals.

The primary aim should therefore be to grow trade, and then work to shape it.

The US orienting AGOA towards a goal, for instance, of the African continent providing at least 5 percent of US imports from worldwide within 5 years would be excellent from the point of view of African countries but also from a domestic perspective of, for instance, diversifying the US’ own global supply chains. Such a goal would also incentivize significant creativity by both US and African government agencies and the private sector on all sides, including driving new investments in value-addition on the African continent, into both minerals and other sectors.

The fact is, there are multiple ways a renewed AGOA that was being discussed in South Africa last week could create a much bigger carrot, an economic cooperation, win-win success story for both the US and Africa in future. The first step, however, will be for the US to take its own medicine and stop using AGOA as a stick for economic coercion.

The post Expert view: AGOA Isn’t the Political Leverage Washington Thinks It Is – appeared first on Development Reimagined.

Africa, despite contributing a mere 3.8% to global greenhouse gas emissions, bears the weight of severe climate hazards. Environmental goods, integral to environmental protection and sustainability, play a crucial role in mitigating these challenges. In 2020, Africa spent US$26.22 billion on EG imports, constituting 77.5% of its overall EG trade volume, raising concerns about potential dependency on EG imports in the long run combat against climate change. While Africa is at a crucial junction in its industrial journey, the report underscores that local manufacturing of environmental goods is not only economically prudent but vital for Africa’s climate and manufacturing resilience, positioning the continent as a key player in the global market for environmental goods.  

The findings reveal Africa’s untapped potential for EG manufacturing, leveraging its rich natural resources, renewable energy, and mineral wealth. Integrated markets and regional collaboration can drive economic growth, competitiveness, and sustainability, supported by eco-friendly production policies. 

Employing a data-driven approach, the report identifies ten countries across Africa’s 5 sub-regions, including Kenya, Ghana, and South Africa, as promising hubs for EG manufacturing. These nations showcase readiness for EG production, signaling robust investment prospects in renewable energy components, electric vehicles, and waste management. 

The report also reveals an increase in China-Africa climate change cooperation, including investment in clean energy projects, but also indicates where even more can be done, including to add value to existing investments. Finally, acknowledging challenges like inadequate infrastructure, limited technical capabilities, and political influences, the report proposes targeted recommendations to overcome these hurdles. 

This report echoes a clarion call for collaborative action, urging governments, industries, and communities to unite for a greener and more prosperous Africa. The untapped potential of local EG manufacturing is presented not just as an economic boost but as a global “win-win” contribution to sustainability.   

Looking ahead, Development Reimagined will use this report to work with and encourage all partners to deliver new and sustained investment in environmental goods manufacturing in Africa, a key means for delivering green growth, environmental sovereignty and Agenda 2063.  

To access and download the full report, please click here for English and here for Chinese.

To talk with our global team of experts and consultants, please contact us at clients@developmentreimagined.com. 

November 2023

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The promotion of the Environmental Goods (EGs) value chain plays a vital role in the global pursuit of achieving net-zero emissions. EGs encompass products and technologies contributing to environmental protection and sustainability, spanning Environmental Protection, Renewable Energy, Environmental Monitoring & Assessment, and Environmentally Preferable Products.

Between 1994 and 2021, global trade in environmental goods grew significantly, yet it remains imbalanced worldwide. China constitutes 17.3% of global EGs exports, while the entire African continent contributes only 1%, with South Africa accounting for over half of that share. Looking forward, Africa could and ideally should emerge as a significant hub for manufacturing environmental goods, leveraging its natural resources, renewable energy, agricultural wealth, and mineral resources.

But how?

Our analysis has pinpointed 10 promising regional manufacturing hubs that African, Chinese and other global stakeholders should closely consider for investment. These top 2 selected countries are situated across 5 regions, each exhibiting diverse potential and are capable of unlocking substantial local capacity for environmental goods manufacturing across the African continent. Integrated markets and regional collaboration can drive economic growth, competitiveness, and sustainability, supported by regulations and policies promoting eco-friendly production.

Have a look at our analysis and review the 10 most promising hubs for environmental goods manufacturing in the infographic below!

To find out how Development Reimagined can support you, your organisation, or Government, please email the team at clients@developmentreimagined.com.

Special thanks go to Yike Fu, Yixin Yu, and Yunong Wu for their work on the graphics and for collecting/analysing the underlying data and this accompanying article.

The data was collated primarily from the IMF Climate Change Dashboard, African countries’ policy statements, various news articles, and our forthcoming report, “Unleashing Africa’s Untapped Potential For Environmental Goods Manufacturing.” which would be launched on November 2, 2023 (11:00 UK; 19:00 Beijing; 13;00 South Africa). You can register for the Zoom webinar here.

You can also watch a video recording of our Africa Climate Summit 2023 event on the same topic here.

If you spot any gaps or have any enquiries, please send your feedback to us at media@developmentreimagined.com, and we will aim to respond ASAP.

November 2023

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Excellencies, distinguished guests, ladies and gentlemen,

Firstly, I would like to extend our heartfelt gratitude to the China Africa Business Council for extending this gracious invitation to us. Congratulations on the launch of your 2023 report, an accomplishment that marks yet another milestone in the China-Africa business ecosystem. We were deeply honored to have collaborated on the 2022 version of this report and are equally privileged to be present today for the 2023 report launch.

I am often asked the question whether I am optimistic about Africa. Every time, my strong, immediate answer is of course – yes. And my answer is backed by the statistics. This year and for the next two years, according to the IMF’s latest forecasts, overall economic growth across the African region will outpace the rest of the world, and African countries will account for 60% of the top 10 fastest-growing economies globally in 2024 and 2025.

This is all despite significant man-made and unavoidable global and regional shocks in recent years – from the COVID-19 pandemic, the Russia-Ukraine war, the war in Sudan and coups in Central and West Africa, to drought and famine in East Africa, earthquakes in North Africa, floods in China and Libya, and much more.

I am also equally optimistic about the Africa-China relationship. It has now been two years since the 8^th Ministerial Conference of the Forum on China Africa Cooperation, held in Dakar, Senegal in November 2021 in the midst of the COVID-19 pandemic. Over this period important strides have been made. In 2022, China-Africa trade in goods reached US$282 billion, 42% of which was exports from Africa to China – exports that are more diverse than ever. Foreign Direct Investment (FDI) from China has almost recovered to pre-pandemic levels and shows strong signs of continued growth.

This progress has all required a great deal of proactive work by African governments and the Chinese government, but African and Chinese business have also been central to this resilience and dynamism. As one of the African members of the China Made in Africa Business Council (CABC) – a Chinese non-governmental organization that has grown significantly over the last two years to now have over 3000 Chinese members, we have been proud to not only document but also make our own contributions to growth and development on the African continent through partnership with Chinese stakeholders.

Whether it is supporting African brands to showcase their amazing “Made in Africa” products at the biennial China Africa Economic and Trade Expo and other trade fairs, working with African Financial Institutions to promote their engagement with Chinese banks, or working with Chinese businesses – often CABC members – to help them scope and make investments into African markets, Made in Africa we have seen the appetite for serious, sustained engagement go from strength to strength.

At the same time, as this report rightly demonstrates, there is a very long way to go. Unfortunately, one of the major reasons for African resilience to the global shocks has been Africa’s marginalization in the world economy on most metrics – from trade to renewable energy production to investment and external debt, Africa’s shares of these global statistics tend to hover between 2-4%. The major exceptions are Africa’s share of global mining and fossil-fuel production. And as this report carefully explains, this is no historic mistake. It is a legacy of plunder and occupation by former imperial powers.

At the same time, including with strong, African-led engagement with China, there Is hope for shifting these patterns, once and for all, and therefore making a major mark on history.

In 2014, when the African Union blueprint for development now known as “Agenda 2063” was launched, the then Chairperson of the African Union Commission, the remarkable Madame Nkosazana Dlamini Zuma wrote a letter to a fictional young man, living in 2063, whom she called Kwame. In this letter, she expressed her expectation that in 2063, Africa will be the third-largest economy in the world, a global manufacturing hub, the home of some of the world’s most prosperous multinationals.

Africa moving up value chains – to produce more “Made in Africa” end-products -Made in Africa will be the only way in which this is possible. And the movement up value chains must happen in every single sector, from producing tea bags to fashion and toys to vehicles and wind turbines on the continent. The Made in Africa Secretariat of the African Continental Free Trade Area (AfCFTA) has identified four key sector priorities for increased cross-continental trade – Made in Africa agro-processing, automotive, pharmaceuticals, and transportation and logistics – to initiate and accelerate this process decisively.

It is a great step.

But this kind of action will only be possible if both African and Chinese businesses – Made in Africa such as those documented in this important report – from small to medium to large, also have this same vision and work together to make it happen.

Both sides can learn so much from each other. African businesses can learn about new and different business models that have worked in Chinese settings and might work in African countries. Chinese firms can learn about African market regulations and working cultures, and therefore, more easily outsource their manufacturing – both to export back to China as well as produce for local markets. African firms can learn about Chinese consumers and adapt their products accordingly. Chinese companies can do the same, and thereby more easily localize. African businesses can understand Chinese management styles and long-distance logistics planning and use these to improve efficiency, driving up productivity.

This special edition of “Chinese Investment in Africa Report 2023” makes a crucial contribution to this mutual engagement and learning.

Explaining the history, the new trends, as well as documenting the activities of Chinese firms on the African continent is not only informative, it is inspirational and motivating. No company can be perfect, no country has no imperfections. But vision, risk appetite and true entrepreneurship as well as strong government support can go a long way.

The road to African prosperity is long, but there is no doubt today that we have all started the journey. Reports like this can help us gather the energy to not only continue, but also take larger, bolder strides, overcoming all shocks we will meet along the way, remain optimistic, and in doing so make and change history.

October 2023

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Over a third (39) of the countries that voted in favour of the resolution were African. Just 6 African countries abstained, and not a single African country voted against the resolution. However, when it came to a Canadian amendment backed by the United States and Israel to unequivocally condemn the 7 October “terrorist attacks” by Hamas, which also demanded that Hamas immediately release the hostages it took during the violent incursion into Israel, only 7 African countries voted in support of this amendment, and 23 African countries felt so strongly they voted against the amendment.

Humanitarian Truce in Gaza

The voting pattern of African countries strongly mirrors the collective continental position in the African Union statement published not long after the attacks on the 7th of October, 2023. In the statement, the AU Chairperson called for both sides to put an end to the military hostilities and return to the negotiation table to implement the principle of the two states living side-by-side.  

Indeed, the adoption of the resolution calling for a “humanitarian truce” which the African continent deeply supports, is a step in a pan-African position regarding the conflict. But a humanitarian truce doesn’t mean an end to this episode of violence, not to talk of a durable and sustainable peace. The resumption of violence has caused countries the world over, including in Africa, to reaffirm and emphasise the importance of the two-state solution. 

While there is a longstanding consensus among African nations that the two-state solution is the best approach for durable and sustainable peace between Israel and Palestine, there simply has not been any real practical initiative at the international level to implement this solution. This can be seen as the inspiration for China calling for the convening of a “more authoritative, wide-ranging and effective international peace conference” soon. 

Overall, African countries have avoided a recency bias in their view of the latest flare-up of the Israel-Palestine conflict. Even a country like Kenya, which voted in favour of both the original text and the amendment, highlighted that Hamas’ revised, supposedly moderated 2017 Charter “still harbors intentions to destroy Israel and its Jewish people.” The African Union’s understanding of the conflict also strongly acknowledges Israel’s systematic violation of the rights of Palestinians, and most importantly, it recognises the failure of the implementation of the two-state solution as a stumbling block to lasting peace between the two nations. As such, the African position is that stakeholders work with partners to take practical and diplomatic steps towards the implementation of the two-state solution. This is the African proposition for lasting peace based on the data.

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Special thanks go to Ovigwe Eguegu and Sena Voncujovi for their work on the graphics and for collecting/analysing the underlying data and this accompanying article.

The data was collated primarily from the United Nations Digital Library, the African Union Commission’s public statement, UN African Country Representatives’ statements from October 27, 2023, and various news articles.

We remain open to more detailed briefings and requests on this topic – both in terms of African views on the Gaza situation as well as implications for African countries of the unrest. If you spot any gaps or have any enquiries, please send your feedback to us at media@developmentreimagined.com, and we will aim to respond ASAP.

October 2023

The post Infographic: African Countries Overwhelmingly Support a Humanitarian Truce in Gaza but Reluctant to Condemn Hamas appeared first on Development Reimagined.