President Cyril Ramaphosa co-chairing the Forum on China-Africa Cooperation (Focac) Summit's Round Table discussions with President Xi Jinping at the Great Hall of the People in Beijing, in the People's Republic of China. Picture: Elmond Jiyane/GCIS
Already the first Forum on China-Africa (Focac) meeting in October 2000 brought together 44 African states. Over the past 18 years, Focac cooperation has applied over 200 Billion USD in investments in the African continent. Most of Africa’s vital infrastructure today exists because of Focac.  

Electronic and mobile connectivity throughout the continent runs on Huawei and ZTE technology. China has financed, supplied and installed road and rail transport, ports and airports, water and sanitation, electricity distribution and generation, hospitals and health, government building infrastructure and even the headquarter installations of the African Union (AU) in Addis Ababa.

The magic formula of Focac is China’s friendly relations and liberation solidarity. It is known today as the “win-win” common development policy. The “win-win” solidarity offers an integrated and centrally controlled development model.

African natural resources are developed and extracted with Chinese capital and know how in partnership with their African owners. They are marketed and sold at world market prices by China who applies the proceeds to infrastructure development projects in Africa, supplemented by generous long-term finance conditions at near zero-interest rates. 

The three cooperation phases – resource extraction, resource marketing, and infrastructure development, are managed by joint government commissions, in terms of bi-lateral so-called Master Facility Agreements. This formula eliminates commercial risk at all stages of the cooperation.

This unique development cooperation eliminates corruption or wasting of resources. All the funds are at all times controlled bi-laterally. This is why the success of Focac today is so visible.  The magnitude of the cooperation is felt even in the individual homes. In South Africa over 4000 bursaries annually for university studies in China are available because of Focac. By comparison, the 28 European Union member states together, do not even give young South Africans 100 university study bursaries.

China has opened its markets without limitations to whatever Africa can produce competitively whilst the EU continues to severely restrict market access to products and services from Africa.

The expectations from the 2018 Focac summit are high. African members hope that the new Belt and Road initiative will reduce the cost of trade and commerce between China and Africa. Africa also hopes that China will transfer more production to Africa and help create new industries. Zimbabwe for instance is 40 years after independence still forced to import all its agricultural fertilizer. Within the Belt and Road initiative, it may soon be able to produce its own fertilizer needs.

Another important hope in Africa is the strengthening of the “people-to-people bond (民心相通)”. The “people-to-people bond (民心相通)” is one of the five pillars of the “Belt & Road Initiative”, the other four pillars being “policy coordination”, “facilities connectivity”, “unimpeded trade”, and “financial integration”.

Regarding the pillar of “policy coordination”, Africa is critically evaluating its political and economic management models. In the early nineties, all African states introduced European models of multi-party democracy. They believed the promise that multi-party democracy would automatically bring about progress and prosperity, just like in Europe. 

But in Africa, multi-party democracy everywhere has brought about election fraud, insecurity, civil wars and abuse of power. Corruption is out of control nearly everywhere, condemning entire populations to abysmal poverty and suffering. Most people in Africa still lack the most basic conditions of human existence: safe water, food security, basic health care, adequate education, and energy.

In 2013, US President Obama promised in Cape Town to “bring electric light to people in Africa where currently there is darkness”. But not a single light was lit up by Obama. Africa is finally realizing that its current governance models are not working.

The eradication of poverty in Africa is a global challenge. Focac has made the greatest contribution to the African struggle for progress. The price has been the accumulation of large new financial indebtedness, in 2018 exceeding 100 billion USD in debt.

A first immediate step to address Africa’s debt within the Focac context could be the conversion of US Dollar denominated debt into a new monetary unit. A new debt settlement monetary unit could be controlled directly by the lenders and borrowers together. 

This would protect Focac from the threat of global economic war declared most recently by US President Trump. It could also open up a path for closer “policy coordination” and improved governance in Africa.

* Professor Dr André Thomashausen is a member of the European Academy of Sciences, Academia Europaea. He serves as a member of the Senior Council of the Southern African-German Chamber of Commerce.

** The views expressed here are not necessarily those of Independent Media.