22, November 2019
Yaounde: Six-nation central African summit debates future of CFA franc 0
Leaders from six central African countries gathered Friday in Cameroon for a summit expected to focus on the CFA franc, whose future has come under question in West Africa.
The extraordinary one-day meeting in Yaounde included leaders from Cameroon, Chad, the Central African Republic, Equatorial Guinea, Gabon and the Republic of Congo.
Cameroon President Biya hosted the summit and said it “gives us a new opportunity to exchange and agree additional measures that can consolidate the economic recovery of our region.”
Five of the six nations were represented by their heads of state, while Gabon, whose President Ali Bongo Ondimba suffered a stroke last year, sent its prime minister.
As members of the Economic and Monetary Community of Central Africa (CEMAC), the nations jointly use the CFA franc, a currency rooted in the French colonial era in western and central Africa.
The CFA franc will be on the agenda, according to press kit distributed by Biya’s office.
“The currency inherited from colonisation divides economists and heads of state in the (CFA) franc zone,” it said.
“(It) is being presented by numerous financial experts as a brake to development.”
The CFA — its initials come from the French words for African Financial Community — was launched on December 26, 1945 as a “franc of the French colonies of Africa.”
The money then morphed into two geographic variants, one for eight countries in western Africa and another for six in central Africa, with a combined population of 155 million people.
CFA member countries must lodge reserves with the Bank of France.
The currency is essentially pegged to the euro, at a fixed rate of 655.96 CFA francs per euro.
The arrangement guarantees unlimited convertibility of CFA francs into euros, facilitates inter-zone transfers and helps price stability.
But detractors say the CFA franc is a “post-colonial” contract that prevents countries from exercising sovereignty over their currency, or which enables France to wield influence in Africa.
The 15 member states of the Economic Community of West African States (ECOWAS) have agreed to adopt a single currency, the “eco”, as early as next year.
Prospects of earlier changes to the region’s currency dramatically surfaced this month when Benin leader Patrice Talon said the western African states planned to pull their reserves from the Bank of France.
“We are all agreed, unanimously, that we should put an end to this model,” Talon told French broadcasters RFI and France 24 on November 14.
Source: AFP
22, November 2019
China Is Not In Africa For Charity, But To Control Its Resources 0
Africa is on the cusp of a new period in its history, its renaissance. Freed from centuries of colonialism and neo-imperialism, Africa has the opportunity to become a center of economic might to provide prosperity to the continent’s growing population. Yet, at present, Africa unfortunately faces a new danger: Sino-imperialism, the risk of falling under the control of China largely through Chinese economic investment and loans. The People’s Republic of China has long supported African states since the Chinese Communist Party (CCP) came to power in 1949. Under Mao, China’s backed African liberation movements in an effort to advance Maoism and offset Soviet and American influence. In much of Africa today, China is the imperialist power.
China is in Africa now not to advance Maoism, but to control its resources, people, and potential. From building railways in Kenya and roads in rural Ethiopia to running mines in the Congo, China has drastically changed the African economic landscape in the twentieth century. China lent nearly $125 billion to Africa between 2000 and 2006 and recently pledged $60 billion at the 2018 Forum on China-Africa Co-operation. The Chinese superficially appear to maintain a mutually beneficial relationship with Africa by providing financial and technical assistance to Africa’s pressing developmental needs. Trade between China and Africa has grown from $10 billion in 2000 to $190 billion by 2017. It is estimated that 12 percent of Africa industrial production, or $500 billion annually—nearly half of Africa’s internationally contracted construction market—is carried out by Chinese firms.
China’s activities in the African continent have yet to receive the attention they deserve in the West. China’s behavior in Africa is important for three major reasons. First, China is the source of significant investment capital twinned with a prodigious ability to create infrastructure, both of which are needed by many African states. Second, China’s behavior in Africa provides the rest of the world with insight into how it will behave towards other states, particularly the states of the Global South, as it becomes equal in power with the United States. Third, what China is doing in Africa does not augur well for the rest of the world. China’s activities and behavior in Africa may only be described as neo-colonial and exploitative of African peoples and the environment.
China’s abusive behavior towards African states has occurred for decades. In 2007, Guy Scott, the former agricultural minister in the Zambian government told The Guardian, “We’ve had bad people before. The whites were bad, the Indians were worse, but the Chinese are worst of all.” But Sino-imperialism is getting worse as China grows in power and seeks evermore resources.
There are copious examples of the negative consequences of Sino-imperialism. One archetypical case is the China National Petroleum Corporation, the state-owned oil and gas company, which is a major investor operating in South Sudanese oil fields. The Chinese pollute the local environment with impunity, resulting in children born with deformities, the poisoning of livestock, destruction of fertile land, and the pollution of rivers. Additionally, the Chinese cause environmental destruction in the Northern Upper Nile and Ruweng states affects the indigenous Dinka Padang communities of South Sudan. The Chinese help produce oil generating revenue and economic opportunities but are not bound with environmental standards.
The Chinese influence in South Sudan also results from road construction and infrastructure development. South Sudan will provide thirty thousand barrels per day of crude to the Export-Import Bank of China to fund the construction of roads and infrastructure development. This includes the construction of a 392-kilometer (244-mile) road from Juba to Rumbek and from Juba to Nadapal on the Kenyan border, which is being built by a Chinese firm using Chinese technology and manpower.
South Sudan’s neighbors, Ethiopia and Kenya, received loans for infrastructure projects from the Chinese. The Chinese Belt and Road Initiative has introduced dynamic infrastructure projects such as the Standard Gauge Railway. The railway connects Djibouti, Ethiopia, and Kenya. The railway was Ethiopia’s first railway in over a century and Africa’s first fully electrified line. The railways cuts travel time from the capital Addis Ababa to Djibouti from two days by road to twelve hours.
The Standard Gauge Railway appears to be providing revolutionary infrastructure to stimulate economic growth, but the details demand scrutiny. The project cost nearly $4.5 billion, partly financed by the China Export-Import Bank. The railway uses Chinese trains, Chinese construction companies, Chinese standards and specifications, and operated by the China Railway Group Limited (CREC) and China Civil Engineering Construction Corporation.
As might be expected from this Sino-imperialist project, the railway has been plagued with technical and financial challenges, which calls into question Ethiopia’s dependence on Chinese technology and debt-finance. The African country is struggling to repay its loan to China and reap the benefits of this dynamic infrastructure project. In 2018, Addis Ababa negotiated with China and structured its loan terms from fifteen to thirty years. In next door Kenya, as a result of heavy borrowing by the government, China may seize the port of Mombasa. According to Kenya’s Daily Nation newspaper, the terms are Draconian and state “neither the borrower [Kenya] nor any of its assets is entitled to any right of immunity on the grounds of sovereignty, with respect to its obligations.”
In addition to these abuses, the Chinese presence in Africa is defined by a purposeful isolation from the indigenous population. Chinese firms bring in their own drivers, construction workers, and support staff, denying these employment opportunities to Africans, and often live apart from the African societies in which they reside.
These activities are only an example of China’s abusive behavior in Africa. Africa endured colonialism and neo-imperialism for hundreds of years. Just as Africa has freed itself from those bonds, it needs to work with the West and other states to provide alternatives to Chinese money and infrastructure. The greatest threat Africa faces today is Sino-imperialism. It is now in danger of being captured by China’s sinister Sino-imperialism that will keep Africa from entering its renaissance.
Source: The National Interest