Aidoghie Paulinus, Abuja
Executive Director of the Centre for Nigerian Studies, Institute of African Studies, Zhejiang Normal University, China, Ehizuelen Omoruyi, has said that China’s infrastructural inroads in Africa, is a welcome development in the continent.
Omoruyi, in a piece titled ‘China’s Barter Method Reshaping African economies,’ made available to Daily Sun in Abuja by the Embassy of the Peoples Republic of China, said to hasten domestic socio-economic growth, there is an unquenchable demand for additional and better infrastructure.
He said while President Donald Trump of the United States of America is obsessed with building walls, President Xi Jinping of China is busy building bridges to encourage good relations among people.
Omoruyi said economically, walls create economic barriers and in turn, hold back shared economic prosperity, but bridges will help drive connectivity, promote peer interaction and in turn, promote shared economic prosperity.
He said African nations need infrastructure, declaring that Africa has a formidable partner in China that is ready to build infrastructure for the continent.
“This paved way for Sino-African resources-for-infrastructure barter formula in Africa’s new development dynamics. This formula is referred to as an “Angola mode” transactions or “deals” or “swaps” or “barter.”
“A new formula of funding infrastructure in resource-endowed nations, but poor in the infrastructure needed for a growing economy. To accelerate domestic socio-economic development, there is an insatiable demand for additional and better infrastructure, with most of the funding coming from outside.
“In 2015, Africa’s total infrastructure deficit reached US$83.4 billion, of which US$20.9 billion came from China. China is building more infrastructures in Africa than any nation in the world,” Omoruyi said.
Omoruyi also said the coming of the Chinese in the African resources market has created a new dynamic in the awakening of fast-growing African economies and consequently, revive the hopes of Africans.
Infrastructure, he added, is certainly an enabler of growth, and in the face of financial constraints from public sources, resource-for-infrastructure swap formula presents a better way to obtain infrastructure.
“The Chinese resource-for-infrastructure loans formula in Africa is distinguished by the sheer size of the loans. Most times, the sheer size can amount to multibillion dollars. These credit lines formula is an important instrument of engagement. The formula has permitted African governments to leverage their resources, wealth as collateral to access credit at a manageable interest rate.
“The swap formula is innovative since, for the first time, it appeared like African resources could be directly converted into development projects. So, the contemporary China-Africa cooperation highpoints is a period in which African nations have an extra option for financing development projects,” Omoruyi added.
Omoruyi also said African nations needed to extend their infrastructure and they are unable to attract sufficient donor assistance, a demand, he said, China is fulfilling.
“So, the introduction of the resource-for-infrastructure swap formula was largely the product of a timely convergence of interests between China and Africa. Since the introduction of the formula, China’s infrastructure projects have burgeoned in the continent of Africa.
“This represents a crucial effect of China’s “going out” policy. China’s approach to economic cooperation with African nations is diametrically opposed to the approach linked with colonialism that is based on the principle of restricting territorial access and trade to protect the interest of the metropolis,” Omoruyi stated.