African Leaders in Beijing Eyeing Big Loans and Investment

People pass by signage for the Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, 01 September 2024. (EPA)
People pass by signage for the Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, 01 September 2024. (EPA)
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African Leaders in Beijing Eyeing Big Loans and Investment

People pass by signage for the Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, 01 September 2024. (EPA)
People pass by signage for the Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, 01 September 2024. (EPA)

African leaders descend on China's capital this week, seeking funds for big-ticket infrastructure projects as they eye mounting great power competition over resources and influence on the continent.

China has expanded ties with African nations in the past decade, furnishing them with billions in loans that have helped build infrastructure but also sometimes stoked controversy by saddling countries with huge debts.

China has sent hundreds of thousands of workers to Africa to build its megaprojects, while tapping the continent's vast natural resources including copper, gold, lithium and rare earth minerals.

Beijing has said this week's China-Africa forum will be its largest diplomatic event since the Covid-19 pandemic, with leaders of South Africa, Nigeria, Kenya and other nations confirmed to attend and dozens of delegations expected.

African countries were "looking to tap the opportunities in China for growth", Ovigwe Eguegu, a policy analyst at consultancy Development Reimagined, told AFP.

China, the world's number two economy, is Africa's largest trading partner, with bilateral trade hitting $167.8 billion in the first half of this year, according to Chinese state media.

Beijing's loans to African nations last year were their highest in five years, research by the Chinese Loans to Africa Database found. Top borrowers were Angola, Ethiopia, Egypt, Nigeria and Kenya.

But analysts said an economic slowdown in China has made Beijing increasingly reluctant to shell out big sums.

China has also resisted offering debt relief, even as some African nations have struggled to repay their loans -- in some cases being forced to slash spending on vital public services.

Since the last China-Africa forum six years ago, "the world experienced a lot of changes, including Covid, geopolitical tension and now these economic challenges", Tang Xiaoyang of Beijing's Tsinghua University told AFP.

The "old model" of loans for "large infrastructure and very rapid industrialization" is simply no longer feasible, he said.

The continent is a key node in Beijing's Belt and Road Initiative, a massive infrastructure project and central pillar of Xi Jinping's bid to expand China's clout overseas.

The BRI has channeled much-needed investment to African countries for projects like railways, ports and hydroelectric plants.

But critics charge Beijing with saddling nations with debt and funding infrastructure projects that damage the environment.

One project in Kenya, a $5 billion railway -- built with finance from Exim Bank of China -- connects the capital Nairobi with the port city of Mombasa.

But a second phase meant to continue the line to Uganda never materialized, as both countries struggled to repay BRI debts.

In central Africa, Western and Chinese firms are racing to secure access to rare minerals.

The continent has rich deposits of manganese, cobalt, nickel and lithium -- crucial for renewable energy technology.

The Moanda region of Gabon alone contains as much as a quarter of known global reserves of manganese, and South Africa accounts for 37 percent of global output of the metal.

Cobalt mining is dominated by the Democratic Republic of Congo, which accounts for 70 percent of the world total. But in terms of processing, China is the leader, at 50 percent.

Mounting geopolitical tensions between the United States and China, which are clashing over everything from the status of self-ruled Taiwan to trade, also weigh on Africa.

Washington has warned against what it sees as Beijing's malign influence.

In 2022, the White House said China sought to "advance its own narrow commercial and geopolitical interests (and) undermine transparency and openness".

Beijing insists it does not want a new cold war with Washington but rather seeks "win-win" cooperation, promoting development while profiting from boosted trade.

"We do not just give aid, give them help," Tsinghua University's Tang said.

"We are just partners with you while you are developing. We are also benefiting from it."

But analysts fear African nations could be forced to pick sides.

"African countries lack leverage against China," Development Reimagined's Eguegu said.

"Some people... think you can use the US to balance China," he said. "You cannot."



OPEC Again Cuts 2024, 2025 Oil Demand Growth Forecasts

The OPEC logo. Reuters
The OPEC logo. Reuters
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OPEC Again Cuts 2024, 2025 Oil Demand Growth Forecasts

The OPEC logo. Reuters
The OPEC logo. Reuters

OPEC cut its forecast for global oil demand growth this year and next on Tuesday, highlighting weakness in China, India and other regions, marking the producer group's fourth consecutive downward revision in the 2024 outlook.

The weaker outlook highlights the challenge facing OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies such as Russia, which earlier this month postponed a plan to start raising output in December against a backdrop of falling prices.

In a monthly report on Tuesday, OPEC said world oil demand would rise by 1.82 million barrels per day in 2024, down from growth of 1.93 million bpd forecast last month. Until August, OPEC had kept the outlook unchanged since its first forecast in July 2023.

In the report, OPEC also cut its 2025 global demand growth estimate to 1.54 million bpd from 1.64 million bpd, Reuters.

China accounted for the bulk of the 2024 downgrade. OPEC trimmed its Chinese growth forecast to 450,000 bpd from 580,000 bpd and said diesel use in September fell year-on-year for a seventh consecutive month.

"Diesel has been under pressure from a slowdown in construction amid weak manufacturing activity, combined with the ongoing deployment of LNG-fuelled trucks," OPEC said with reference to China.

Oil pared gains after the report was issued, with Brent crude trading below $73 a barrel.

Forecasts on the strength of demand growth in 2024 vary widely, partly due to differences over demand from China and the pace of the world's switch to cleaner fuels.

OPEC is still at the top of industry estimates and has a long way to go to match the International Energy Agency's far lower view.

The IEA, which represents industrialised countries, sees demand growth of 860,000 bpd in 2024. The agency is scheduled to update its figures on Thursday.

- OUTPUT RISES

OPEC+ has implemented a series of output cuts since late 2022 to support prices, most of which are in place until the end of 2025.

The group was to start unwinding the most recent layer of cuts of 2.2 million bpd from December but said on Nov. 3 it will delay the plan for a month, as weak demand and rising supply outside the group maintain downward pressure on the market.

OPEC's output is also rising, the report showed, with Libyan production rebounding after being cut by unrest. OPEC+ pumped 40.34 million bpd in October, up 215,000 bpd from September. Iraq cut output to 4.07 million bpd, closer to its 4 million bpd quota.

As well as Iraq, OPEC has named Russia and Kazakhstan as among the OPEC+ countries which pumped above quotas.

Russia's output edged up in October by 9,000 bpd to about 9.01 million bpd, OPEC said, slightly above its quota.