China-related investment projects being suspended by African nation citing 'shoddy' work

In the newest source of worry for Chinese authorities, African nations are appearing to corner Beijing on matters related to investment with several of them even suspending contracts with Chinese companies, reported news agency ANI citing Singapore Post article. The article, published on Monday, 20 September 2021, stated that some of the African countries cancelled the contracts with China-based companies owing to “shoddy” work which has also budded tension for the ruling dispensations in several nations across Africa.

Following Ghana’s cancellation of the contract with Beijing Everyway Traffic and Lighting Tech company, the President of the Democratic Republic of Congo (DRC) Felix Tshisekedi called for a review of mining contracts previously signed with China in 2008, stated the report. Beijing Everyway Traffic and Lighting Tech company had a contract with Ghana for developing an intelligent traffic management system for the country.

However, DRC President has said that he is seeking fairer deals for the country. Expressing discontent with the exploitative tendency of China, Tshisekedi said, “Those with whom his country signed contracts are getting richer while DRC people remain poor."

Congo’s former Prez signed deals with Chinese firms

Reportedly, former Congo President Joseph Kabila who held office from 2001 to 2019, signed deals with Chinese state-backed firms in 2008 including Sinohydro Corp and China Railway Group. Under the agreement, the Chinese firms were supposed to build roads, hospitals, bridges in the Democratic Republic of Congo in return for a 68 per cent stake in the country’s Sicomines venture.

ANI further stated that the projects involving China-based companies fell in Congo due to a lack of transparency. The government of Ghana also cancelled the project because they found the work by Everyway Traffic and Lighting Tech unsatisfactory. Earlier in July 2020, a Kenyan High Court ordered the cancellation of a US$3.2 billion contract between Kenya and China for the construction of the Standard Gauge Railway. According to the court, the entire project was “illegal” and stated that the state-run Kenya railways were unsuccessful in complying with Kenyan law in the procurement of the Standard Gauge Railway.

Notably, as per John Hopkins University School of Advanced International Studies' China-Africa Research Initiative, just between 2000 and 2019, China reached 1,141 loan commitments worth USD 153 billion with the African governments as well as their state-owned enterprises. As per the Singapore Post article cited by ANI, the whopping loan amounts have become unsustainable for the poor African nations considering the additional crisis of the COVID-19 pandemic. 

Hence, with limited options in hand, the countries have taken the choice to suspend the projects and manage debts. Notably, what worries the Chinese authorities is that most of the suspended projects in Africa are of Beijing's ambitious Belt and Road Initiative (BRI) started by Communist leader Xi Jinping in 2013 to connect Asia with Africa and Europe through land and maritime trade networks. 

IMAGE: AP