Infrastructure in Africa: The G7 is investing $ 600 billion

VS ‘it’s a year-long project that the United States hopes will be able to get back on track this time. To curb Chinese expansion, the Biden administration presented the Build Back Better World (B3W) initiative at the Carbis Bay G7 summit in the United Kingdom in June 2021 with several hundred billion dollars, aimed at investing in such diverse areas as climate, health, equality between men and women or technology in developing countries. However, so far, according to experts, the initiative has received too little support from the G7, especially since this investment plan has not been approved by the US Congress.

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$ 600 billion infrastructure program

A year later, the initiative was renamed the Global Infrastructure Partnership, and the United States has a much better intention of persuading G7 leaders to agree to fund projects in middle- and low-income countries worth $ 600 billion over the next five years. “Together with the G7 partners, we seek to mobilize $ 600 billion by 2027 for global infrastructure investment,” said the White House shortly before a speech by US President Joe Biden, who unveiled the proposal at a summit of seven industrialized nations in southern Germany. The American president assured that this program is based on “common values”, such as “transparency”, as well as on respect for workers’ rights, the environment, and gender equality. “We offer the best options,” he said against the backdrop of the Bavarian Alps.

Neither the US president nor other leaders have named China, but have made obvious allusions to it. The President of the European Commission, Ursula von der Leyen, thus believed that Western partner countries “had a choice” – to go to democracies, not to Beijing – to develop their electricity networks or their medical infrastructure.

The answer to huge projects funded by China

Westerners want to distance themselves from China, which has invested heavily in a number of developing countries to build infrastructure through a so-called “new Silk Road” program or to provide access to certain raw materials. In 2013, Beijing launched its land and maritime infrastructure development initiative to connect Asia, Europe and Africa with China. But after eight years, there have been many complaints: “opaque” calls for tenders, suspicions of corruption for contracts or even non-compliance with human rights, social rights and the environment.

Beijing is accused of carrying out its projects because of unprofitable, non-transparent loans – hence the “transparency” promised by the G7 countries – even frankly dangerous, which will exacerbate the debt problems of already vulnerable countries. In particular, in Africa, China has managed to win contracts by offering projects that are much cheaper than competitors. The “Partnership for Global Infrastructure” should “give the world a better agreement on infrastructure investment,” said German Chancellor Olaf Scholz.

The United States alone promises to “mobilize” about $ 200 billion over five years. But “mobilization” does not mean that the states themselves will provide these huge sums. Washington receives a total of $ 200 billion, combining loans, government funding – some that already exist – and private funding encouraged by the US executive. But “Russia’s invasion of Ukraine and the uncertain economic recovery after Covid-19 threaten to undermine the G7’s progress on this agenda,” Chatham House said in a June 24 note on the G7’s role in rebuilding the global economy. The change in priorities among donor countries caused by the events in Ukraine risks provoking further shifts in the development policy of these countries towards greater bilateralism. ” For authors Cynthia Liao and Theo Bill, “Politicians should consider where the benefits of working with China outweigh the risks, and where the BRI approach can complement the G7-based approach of values. It is possible that the major powers will work together to increase benefits for beneficiary countries.

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The priority of sub-Saharan Africa

With these big numbers, which are still uncertain, and these good intentions, can Westerners reverse the trend in the face of China? The United States wants to believe that. The Chinese offensive “lasted for years,” a senior White House official said, “but it’s not really too late.” “Many countries have received funds or investments from the BRI program [acronyme de la dénomination en anglais « Belt and Road Initiative », le programme chinois] now they realize, years later, that they are more debtors, that their GDP has not advanced significantly, “- said the same source, who did not want to be named. “Sub-Saharan Africa will undoubtedly be the top priority” of the G7-launched partnership, the official said. It should be noted that the infrastructure suffers from very insufficient funding on the continent. The African Development Bank (ADB) estimates needs at $ 130-170 billion a year with a deficit of $ 53 billion to $ 93 billion a year.

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