A recent report by Baker and McKenzie highlights the potential importance of The Belt and Road Initiative (BRI) for African countries; in particular East Africa and Egypt. The BRI includes the Century Maritime Silk Road and the Silk Road Economic Belt, and focuses on policy, trade and financial integration.
By 2050, 25% of the world’s nine billion population will be Africans, and China is looking to establish a long term partnership with African countries, but also to “lay claim” to the continent with increased infrastructure investment.
China has been the biggest provider of loans and investment in the East African Community’s (EAC) expanding infrastructure drive, and projects range from rail, such as the Mombasa–Nairobi Standard Gauge Railway, and port developments, such as the proposed Bagamoyo Port in Tanzania.
Ethiopia is with South Africa, the most aligned with China’s trade policy. Ethiopia’s industrialisation policy is gaining traction, with China a central player. In October Ethiopia unveiled the 750km Ethiopia- Djibouti railway, built by two Chinese companies, which links Addis Ababa to the strategic Red Sea port city of Djibouti. Ethiopia’s agriculture sectors also hold great potential, as the country seeks to modernise farming and establishing linkages to global value chains (e.g. cotton for textiles, coffee).
In North Africa, Egypt is an important manufacturing player in China’s Africa strategy. The country is a member of the Common Market for Eastern and Southern Africa (COMESA), and the most industrialised member state (South Africa is not a member) and low cost producer. The report noted the importance of partner alliances in Egypt, for Chinese companies to succeed. Mozambique, not included in the report, is another country that could benefit from the BRI, through infrastructure investment and trade.
The BRI includes more than 60 countries in Asia, the Middle East, Eastern Africa and Eastern Europe, and is estimated to be worth $350 billion over five years. President Xi Jinping announced the initiative in 2013.