US Can Help Africa Escape China’s ‘Debt Trap,’ Former Mr. Africa Says

Akol Nyok Akol Dok, a South Sudanese business consultant speaks at the South Sudan investment road show in New York City, on April 12, 2019. Courtesy of Akol Nyok Akol Dok

China is rapidly gaining political and economic influence in Africa through its “debt trap diplomacy,” and to counter the Beijing regime’s regional hegemony, the United States must change its approach to the continent, an African business consultant and political activist said.

China will soon be controlling Africa and when the United States turns its attention to the continent, it will be too late, warned Akol Nyok Akol Dok, a South Sudanese business consultant and an activist who raises awareness about China’s neocolonial One Belt, One Road Initiative (OBOR). Dok was also Mr. Africa International in 2016.

Through OBOR, China is pouring billions of dollars into Africa to support the infrastructure development of the African states. Many of these projects, however, are financed by loans with opaque terms provided by China’s state-controlled lenders.

In recent years, the initiative has been critiqued as “debt trap diplomacy,” raising the risk of economic distress in borrowing countries and putting their sovereignty at risk.

The countries that are trapped in China’s explosive loans end up losing control of their assets. The South Asian country of Sri Lanka is a prominent example, where the country handed over its Hambantota Port to Chinese companies in 2017 for a 99-year lease, when it failed to repay its $8 billion debt.

And African states are likely to do the same. There are reports that China has seized a number of assets in Zambia, including ZESCO, the national power utility. However, Zambia has denied such claims.

According to Dok, African countries face difficulties in financing their infrastructure projects. They can’t get enough funds from the International Monetary Fund, the World Bank, or from Western nations.

“Chinese come in and give them loan options, with no strings attached. But as these countries struggle to pay off these loans, the Chinese begin to seize assets and begin to take over various industries,” he said.

The top three African countries with the largest amounts of Chinese loans are Angola, Ethiopia, and Kenya, and they are all in debt distress.

In addition, many infrastructure projects benefit Chinese contractors rather than local businesses. Nearly 89 percent of the OBOR contractors are Chinese companies, according to the World Economic Forum. And these projects rely heavily on Chinese labor, rather than the local workforce, which causes resentment in the host countries.

China’s Narrative

Beijing’s influence in South Sudan is also growing; China is the biggest investor in the country’s oil industry.

“Many people in South Sudan have a positive opinion of the United States and the West, but they feel as if sometimes the West and the United States are working against them and looking down on them,” Dok said.

“And that’s a narrative that China plays on,” he said, adding that the Chinese have benefited from Africans’ bad memories of Western domination and colonialism.

According to Dok, China and the United States diverge in their approach to Africa. The Chinese regime, for example, doesn’t press African states for promoting certain Western values, such as democracy and human rights.

While Dok thinks the Western strategy is more paternalistic, focusing more on the internal political system and telling Africans what to do, he says the current U.S. sanctions on South Sudan have kept local companies from buying American technology and equipment.

According to Dok, the United States has to change its foreign policy toward African states and become partners with them to counter China’s hegemony.

“When you develop an economy, then you can promote a better political system. Because most issues in Africa evolve from poverty and poverty is an economic issue,” he said.

South Sudan

A landlocked country in east-central Africa, South Sudan is poverty-stricken, despite having the third largest oil reserves in Africa.

The country gained its independence from Sudan in 2011. Its population of 12 million is among the youngest in the world, with about 74 percent below the age of 30. Its vast natural resources and young population make South Sudan an ideal location for a business venture, Dok said.

Since the 1990s, China has been a dominant player in the oil and gas industry of South Sudan. Chinese companies own nearly 47 percent of Dar Petroleum, which is the only consortium producing oil at significant volumes in the African state. Chinese companies also hold the majority of the service contracts in the nation’s oil fields.

To fund the new infrastructure projects, the South Sudan government recently agreed to supply 30,000 barrels per day of crude oil to the Export-Import Bank of China. The country currently produces 170,000 barrels per day.

While people do see the looming threat of China, many of them are still oblivious to it, Dok said, as they want roads, schools, and hospitals.

“The Chinese are building a hospital in Juba right now, one of the first hospitals in the capital city. So people are looking more at the product than the policy threat.”

In March, China’s state-run media Xinhua announced that the China Civil Engineering Construction Corp. would build at least 26 hospitals across South Sudan. The country received a $33 million grant from the Chinese regime in 2013 to renovate and expand health facilities throughout the country.

However, these infrastructure projects don’t benefit the local contractors or workers, said Dok, who added that it isn’t in China’s interest to train the local workforce and lift them out of poverty.

“When the Chinese control the technology, when they control the resources, it’s hard to get some locals involved,” Dok said. “They don’t want [the local] people to be independent. Because if they are independent, they won’t be able to bring the Chinese.”