African Countries may be able to get a better deal from China if they join forces and bargain collectively, rather than trying to improve the terms of agreements signed with Beijing on an individual basis, observers say.

Critics of the deals signed on an individual basis have long complained about their opacity and lack of transparency.

Some analysts argue that by appreciating that they have substantial bargaining power could open the way for well-managed African countries to demand more openness in the way China does business on the continent and reduce the risk of countries running up unsustainable debts.

Seifudein Adem, a Professor at Doshisha University in Japan, says Africa’s problems have been linked to leadership failures or the absence of accountable governments.

“Wherever I go, what strikes me most is how immense Africa’s potential is. If Africa had enlightened leaders and could speak in one voice we would be talking today about Africa’s century,” said Adem, a China-Africa relations specialist.

He said this would be possible if African countries could speak to China and other countries with one voice.

However, as it stands, he said: “Africa’s approach to China is so short-sighted, and this is unsurprising given that many African states are led by elites who fear or expect to lose power in the future in an environment of intense inter-group rivalry.”

Winslow Robertson, founder of Cowries and Rice, a management consultancy, argues that African countries need their own Chinese speakers to help negotiate better terms.

“They also need lawyers who can look at the contracts and fight on their behalf. A lot of Chinese contracts, from the little evidence that we have seen, have terrible terms.

“In terms of interest rates, they are fine and more competitive than what the countries can get in the market. But when it comes to issues like arbitration, it is terrible as it would be done in China through the Chinese mechanism.”

Robertson, who is also a doctoral candidate at IESE Business School in Barcelona, said most of the contracts were forms of rent-seeking.

“The prices are inflated in a such a way that there is no bidding process. It is going to be a Chinese contractor and money is paid directly to their account.”

African countries may be able to get a better deal from China if they join forces and bargain collectively, rather than trying to improve the terms of agreements signed with Beijing on an individual basis, observers say.

Critics of the deals signed on an individual basis have long complained about their opacity and lack of transparency.

Some analysts argue that by appreciating that they have substantial bargaining power could open the way for well-managed African countries to demand more openness in the way China does business on the continent and reduce the risk of countries running up unsustainable debts.

Seifudein Adem, a Professor at Doshisha University in Japan, says Africa’s problems have been linked to leadership failures or the absence of accountable governments.
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“Wherever I go, what strikes me most is how immense Africa’s potential is. If Africa had enlightened leaders and could speak in one voice we would be talking today about Africa’s century,” said Adem, a China-Africa relations specialist.

He said this would be possible if African countries could speak to China and other countries with one voice.

However, as it stands, he said: “Africa’s approach to China is so short-sighted, and this is unsurprising given that many African states are led by elites who fear or expect to lose power in the future in an environment of intense inter-group rivalry.”

Winslow Robertson, founder of Cowries and Rice, a management consultancy, argues that African countries need their own Chinese speakers to help negotiate better terms.

“They also need lawyers who can look at the contracts and fight on their behalf. A lot of Chinese contracts, from the little evidence that we have seen, have terrible terms.
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“In terms of interest rates, they are fine and [more] competitive than what the countries can get in the market. But when it comes to issues like arbitration, it is terrible as it would be done in China through the Chinese mechanism.”

Robertson, who is also a doctoral candidate at IESE Business School in Barcelona, said most of the contracts were forms of rent-seeking.

“The prices are inflated in a such a way that there is no bidding process. It is going to be a Chinese contractor and money is paid directly to their account.”

Observers argue that the large power gap that exists between China and individual countries makes it difficult for some countries to benefit from the relationship.

Dominik Kopinski, an assistant professor at the Institute of International Studies at the University of Wroclaw in Poland, said one viable way to help smaller countries would be to go through the African Union.

“But again, there are many stumbling blocks down the road, such as regional hegemons like Nigeria and South Africa, whose attitude is quite lukewarm,” said Kopinski, who is also the director of the Polish Centre for African Studies.

Smaller African countries may fear that they would be excluded from good China deals if they went through the AU.

The bloc also suffers from many inefficiencies as well as a perceived lack of legitimacy, and its headquarters in Addis Ababa, the capital of Ethiopia, was built and paid for by China.

However, China is still eager to gain access to Africa’s resources, and its deep pockets coupled with an insistence that no political strings will be attached to infrastructure contracts have proved to be an irresistible lure for many African elites but also one that discourages rigorous management of projects and feeds corruption.

Beijing has vowed not to interfere with African countries’ domestic affairs, but when dealing with corrupt and undemocratic leaders this arguably makes government problems worse.

Patrick Keenan, a professor of international law at the University of Illinois, said China’s approach was not markedly different from that taken by many Western states except for the rhetoric it used.

“China disclaims any strategic objectives while clearly and intelligently pursuing strategic interests. China’s rhetoric has allowed some African politicians to argue that China is a preferable trading partner because China better respects sovereignty. This has bolstered these leaders and exacerbated the problem of corruption,” Keenan said.

“Again, that’s not to suggest that Western states behave better; it’s just that the negative externalities associated with Western aid tend to be more obvious.”

Author: Jevans Nyabiage
Editor’s note: The article reflects the author’s opinion only, and not necessarily the views of editorial opinion of Belt & Road News.