Africa’s rising indebtedness to China is prompting concern across the continent that governments need to do a better job negotiating infrastructure financing deals. Too often, critics contend, the Chinese are simply out-maneuvering their African counterparts in the negotiating process.
This is the core of the accusation that China is engaging in “predatory lending” in Africa, where Beijing entraps local governments with massive debts that will be difficult, if not impossible, to repay. When these governments invariably default, according to the “debt trap” theory, China will either take control of strategic African assets used as collateral or use its position for enhanced political influence.
The problem with this theory is that it too often strips Africans of their agency in the negotiating process. That either they don’t know what they are doing or they’re simply negotiating bad deals. While both of those may be true, in some instances, the reality is far more complex, according to University of Oxford scholar Folashadé Soulé.
Soulé is among the world’s leading experts on the negotiation practices of African governments, particularly in West Africa, and their dealings with the Chinese. Her research reveals huge differences in how African governments at all levels (national, state, local) negotiate contracts with the Chinese.
In a recently published article in The Conversation, Soulé recommended four things that Africans can do to negotiate better infrastructure deals with the Chinese:
- Involve everyone: When all relevant government departments are involved in a negotiation, it takes longer. However, the process is more coherent, and the resulting project is less likely to breach national regulations.
- Empower the negotiators: Too often, leaders or their senior advisors intervene in the process and undermine negotiators.
- Keep the public onside: Dealing with China can be very controversial in some countries, so if a deal is to succeed it is important to make sure the public also understands the value of interacting with Chinese financiers.
- Increase knowledge: African governments are still relatively new to dealing with China; they should take every opportunity to share lessons with one another.
Soulé joins Eric and Cobus to discuss her four recommendations and whether they are actually feasible in both autocratic and democratic governments in Africa.
Recommendations
- “How to Negotiate Infrastructure Deals with China: Four Things African Governments Need to Get Right,” Folashadé Soulé, The Conversation, January 4, 2019
- “Should Africa Be Wary of Chinese Debt?,” Larry Madowo, BBC News, September 3, 2018