By MOHAMED ADOW

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African flea markets in towns and cities, from Lome in Togo to Pemba in Mozambique, are a daily hive of activity as vendors sell their wares, ranging from nail cutters and plastic brooms to mobile phones, solar panels and much more as African life gradually modernises to keep up with what it means to live in the 21^st century.

The common thread in these markets is that most products are stamped and printed with the words “Made in China” and, while the vendors eke out a living hawking these assorted wares, most of them do not know that one of the major reasons there is such access to China-made goods is the concerted work and negotiations done through the Forum on China-Africa Cooperation (Focac).

I was musing over these flea markets as I watched African presidents assemble in China recently for the 9^th edition of the China-Africa gathering, where President Xi Jinping met 53 heads of state and government from Africa. The key themes of the meeting were state governance, industrialisation and agricultural modernisation, peace and security, and Beijing’s pet projects in its Belt and Road Initiative.

With Africa’s limited energy access, food insecurity, and debt woes increasing and China searching for quality investments abroad, this year's summit was an opportune moment for Africa to negotiate a stronger “win-win partnership” with its Chinese partner, and the outcome of the forum was presented as an Action Plan based on ten partnership initiatives. 

Significant changes that have changed China’s position and strength globally have occurred since the last Africa-China forum. Increasing tensions between China and the West have resulted in the enactment of policies and legislations from the USA and the European Union targeted at limiting China’s growing dominance in renewable technologies such as the electric vehicles (EV) market, chip-making and telecommunications.

This, therefore, presented an opportune moment for Africa to negotiate harder for its core needs, such as green infrastructure development, cheaper financing, technology transfer and industrial development. In all these areas, Africa has something but, in hindsight, it falls short of what is required to mitigate its growing needs sufficiently.

In the Focac partnership initiative on industrialisation, China has promised to support Africa in developing local value chains, manufacturing and deep processing of critical minerals by supporting 10 industrial parks and holding 100 training sessions on industrialisation. This will be supported by direct investment in refining and processing of Africa’s critical minerals and developing smelting technology.

The wording clearly sets out the parameters and extent to which China is willing to support Africa’s industrialisation. While this is welcome, it is underwhelming as it limits Africa’s industrialisation to the early stages of the value chain of refining and processing, which is already occurring in the Democratic Republic of Congo, Zambia and Zimbabwe.

The fact of the matter is that Africa needs to move higher up the value chain, such as electric vehicle transport manufacturing, which is possible in countries such as South Africa and Morocco. With collectively about 40 percent of critical energy transition minerals needed globally, Africa could have received better concessions in the industrialisation partnership.

The Action Plan also continues China’s strategic shift away from development finance to market-based financing. The “market-oriented” financing approach has been necessitated by China’s economic slowdown and African countries' increasingly heavy debt burdens from multiple creditors globally, including China.

China has committed to provide RMB360 billon (about $50 billion) worth of funding for all 10 partnership initiatives over the next three years. Of this, 58 percent will be through loans, about 20 percent through assistance of different types, and another 20 percent by investment from Chinese companies.

There is no doubt that this headline amount of financing will support important work for Africa-China relationships, but the heady days of investment from China that we enjoyed during the 2010s are clearly no more.

A promising opportunity is the promotion and issuance of green panda bonds by African countries and the China-Africa Development Fund (Cadfund). Green panda bonds are RMB-denominated bonds issued in mainland China by a foreign entity, with proceeds earmarked for renewable energy projects.

In 2023, Egypt announced a green panda bond worth nearly $500 million, and the current Chinese bond market is worth more than $21 trillion. As an alternative to the Western US dollar-denominated bonds, this is a tangible financing alternative that Africa, through primarily private investment, can gain from. However, there is a need to refocus on how public finance from regional banks both in Africa and China can be supported through concessional loans.

That can only happen if African heads of state start approaching these forums from a single, united front. In Beijing, it was clearly that each state was fronting its own needs, ignoring the power of unity.

 Yet, the world over, negotiating as a bloc amplifies collective bargaining power, enabling smaller or individual entities to secure better deals. By refusing to pool resources, align goals, and present a unified front, Africa keeps missing the opportunity to demand more favourable terms, resist pressure, and enhance leverage in negotiations, ensuring mutual benefits and stronger outcomes.

There were flashes of brilliance, though. For instance, the Focac Action Plan specifically mentions Chinese support for the Continental Power Systems Master Plan under the leadership of the Auda-Nepad Agency and within the framework of AU Agenda 2063.

And this, in my view, supports the argument that Africa needs to harness the negotiating power of a pan-continental outlook to benefit from the economies of scale. One can only imagine how many more concessions African nations with critical minerals would receive if they negotiated as an “African critical minerals club” for better financing and more technology transfer. 

The changing global political economy, the need for African green industrialisation based on critical energy transition minerals, and the latent negotiating power of Africa bodes well for Africa’s growing diplomatic, economic power globally.

China is certainly the most feasible power that Africa can have a strong reciprocal relationship with, and the 9^th Focac has shown this to be true. But more work needs to be done for the relationship to flourish, and we hope that by the time of the next Focac, more products in the flea markets of Africa will be branded “Made in Africa.”

Mohamed Adow is Director, Power Shift Africa.