This edition examines Chinese financing trends in Africa, in the wake of the triennial Forum for China-Africa Cooperation. We weigh up the threat of “debt-trap diplomacy” on the continent, and highlight potential concerns regarding social, environmental and corruption issues associated with Chinese investment.

Our second piece analyses the first year in office of Angolan president João Lourenço. Despite encouraging signs regarding his zeal for reform on the economic and anti-corruption fronts, the jury remains out on his ability to enact substantive change.

Finally, we assess developments in the DRC, where Joseph Kabila has confirmed his intention to stand down as president, ahead of elections in December.

 Chinese Investment in Africa  More of the same? 

The seventh Forum for China-Africa Cooperation (FOCAC) held during the first week of September made it clear that Beijing has no intention of slowing down when it comes to deepening financial ties with the African continent. At this year’s meeting Chinese president Xi Jinping announced that China would match his record commitment made in 2015 to make $60 billion worth of aid, investment and loans available to African countries over the next three years.

 The shape of Chinese finance 

To date, Chinese policy banks – the China Development Bank and Export-Import Bank of China – have spearheaded the campaign via loans to African governments and state-owned entities, turning China into sub-Saharan Africa’s largest creditor with an estimated 14 percent of the region’s debt stock, excluding South Africa. The focus of this debt finance has been on addressing the region’s substantial infrastructure deficit – a trend which has seen the gross annual revenue of Chinese construction contracts in Africa increase from $1 billion to $55 billion between 2000 and 2015.

China’s trade with Africa has also expanded significantly – fed by Chinese demand for fuel, metals and minerals – with the country becoming sub-Saharan Africa’s largest export destination over the past decade. Foreign direct investment (FDI) from China has grown from a small base, to make the country the fourth largest FDI provider to the continent after the US, UK and France.

The main recent driver behind the substantial increase in Chinese finance into Africa has been Beijing’s Belt and Road Initiative (BRI), introduced by Xi Jinping in 2013. The BRI is aimed at improving access to foreign markets and resources by investing heavily in land and sea infrastructure projects across the Middle East, Asia, Europe and Africa. Initially focussed on East Africa, the BRI’s scope within the continent has expanded. A diplomatic tour by Xi Jinping in August marked this clearly – with Senegal becoming the first west African government to sign up to the BRI, and Rwanda, South Africa and Mauritius also featuring on the Chinese president’s itinerary, and receiving major funding commitments in his wake.

 Debt-trap diplomacy? 

Increased Chinese engagement with the continent has not been without its critics. China has been accused of engaging in “debt-trap diplomacy”, whereby loans are traded for political influence and strategic assets. The example of the Hambantota Port in Sri Lanka is frequently raised. In 2017, China took control of the port after Sri Lanka was unable to repay the debts owed to Chinese banks. Government officials from the US, India, and Japan have since raised concerns that part of the port may be used a naval base.

The concern would appear particularly relevant to Africa, following recent IMF reporting that two fifths of low-income countries in Africa are facing a debt crisis. In Djibouti, where China holds over 80 percent of external debt, these concerns appear to have substance. The government received a $590 million loan from the Export-Import Bank of China in 2015 to build a port and, in 2017, China built its first overseas military base on an adjacent site. The US’s only Africa-located military base, Camp Lemonnier, is 11 kilometres from the port. The building of the port and subsequent Chinese military base has led to concerns among the US foreign policy community that Camp Lemonnier could be handed over to China and the US military ejected from the country if Djibouti is unable to pay its debts – several senators wrote to the US National Security Advisor in May, flagging these concerns, which they argued were made real by Djiboutian president Ismail Omar Guelleh’s failure to respect the rule of law, and his willingness “to sell his country to the highest bidder”.

A wider look shows, however, that Djibouti appears to be more the exception than the rule. According to research by the China-Africa Research Initiative at Johns Hopkins University, of 17 African countries in, or at high risk of, debt distress, China is the main contributor of debt to only three – Djibouti, Republic of the Congo, and Zambia.

 Governance Concerns 

Governance concerns associated with Chinese financing are generally more valid. Chinese banks are not bound by the investment criteria of the Organization for Economic Cooperation and Development (OECD) – which has set the bar for environmental and social considerations by other major investors into Africa. The largest recipient of Chinese loans in the 21st century has been Angola, whose government has only recently attempted to reform its reputation for corruption (see next article). Chinese infrastructure loans are also peculiarly susceptible to contract inflation, as a result of the finance being tied to the use of specified contractors. Recent billion-dollar loans from Chinese lenders to fund a Kenyan railway and a South African state-owned transport company have been accompanied by accusations of high-level corruption.

Chinese financiers are increasingly cognisant of the need to address such concerns, not least due to their desire to court US companies as partners in BRI projects. This year’s FOCAC was notable for its overtures to the model of Western development finance in Africa, with a declaration of intent to diversify African economies away from an over-dependence on the extractives sector, and to encourage greater FDI from Chinese companies in Africa. Equally encouraging, Chinese banks have recently drafted sustainability criteria aimed at matching those of the World Bank. It appears China is attempting to replace its burgeoning – if not wholly deserved – reputation as an exploitative rent-seeker in Africa with that of a mutually beneficial business partner. Policymakers and investors alike will wait cautiously by, assessing whether there is substance behind the intent.

 Chinese debt, FDI and exports in African countries 

 Angola after Dos Santos  One year on 

João Lourenço’s first 12 months as president of Angola have been characterised by a strong anti-corruption movement, dismantling the regime of José Eduardo dos Santos – who ruled from 1979 to 2017 – and trying to revive the Angolan economy. Lourenço’s aggressive stance against corruption and swift action against key members of the former ruling family earned him the nickname “the Terminator” in local media and his initial attempts to diversify the economy and introduce economic reform were praised by the likes of the International Monetary Fund (IMF) and the World Bank. In elections in early September, his power was further consolidated via his nomination as head of the ruling People’s Movement for the Liberation of Angola (MPLA), replacing dos Santos.

Economic Reforms

Despite the early praise, Lourenço’s efforts to revive the economy have been less effective than hoped. In a country where nearly everything is imported, reduced oil prices have starved local banks of foreign currency and resulted in a liquidity crisis. This – coupled with lower than expected growth, lower government revenues and rampant inflation – has resulted in a balance of payments crisis that forced Angolan finance officials to approach the IMF in August for a $4.5 billion financial assistance programme in exchange for on-going financial and economic reform.

From an external perspective this move is seen as encouraging because it will increase transparency and provide reassurance to investors who will gain a more in-depth view of the country’s financial health. The technical assistance from the IMF will assist in stabilising international currency reserves, identifying key risks to financial markets, and improving supervision and regulation of the banking system. Other key focus areas of the IMF intervention will likely include fiscal consolidation to ensure debt sustainability, increased private sector participation, and accelerating diversification efforts. Other economic and financial measures such as the unpegging of the Angolan kwanza from the US dollar in January and the lifting in April of a law requiring foreign investors to have local partners, are making Angola more attractive to foreign investors.



“Lourenço’s aggressive stance against corruption and swift action against key members of the former ruling family earned him the nickname “the Terminator” in local media”

Anti-Corruption Drive

In terms of addressing corruption and dismantling the complex systems of patronage that became endemic under dos Santos’ 38-year rule, the outlook is mixed. According to Transparency International’s Corruption Perceptions Index, Angola has been one of the 20 most corrupt countries in the world for the past 10 years. It is alleged that Lourenço was handpicked by dos Santos precisely because he was corrupt and enriched himself through graft while serving as an Angolan army general, the MPLA’s secretary-general and the Angolan defence minister.

When Lourenço came to power in September 2017 it was assumed that he would play the role of a puppet president, but he immediately started removing dos Santos loyalists and other high profile officials and replacing them with individuals who were loyal to him. He removed central bank governor and dos Santos loyalist, Valter Filipe, fired dos Santos’ daughter, Isabel, from state-owned oil and gas company Sonangol and dismissed his son, Zenú as the head of the Angolan sovereign wealth fund.

Lourenço dismissed a further 60 government officials on the basis of corrupt activities and nepotism. He also replaced the boards of several state-owned companies loyal to dos Santos and the treasury director at the finance ministry, who was accused of embezzlement and sent to jail. Lourenço dismissed the chief of staff of the armed forces, replacing him with one of his most trusted supporters, Antonio Egidio de Sousa Santos. In addition, the former foreign intelligence chief, Lieutenant General André de Oliveira João Sango, was removed from his position and replaced by a reported Lourenço loyalist. In sum, the majority of Lourenço’s key appointments have been associates of his.

Genuine Intent?

The actions taken so far by Lourenço have meant that, anecdotally, the culture of bribery is losing its appeal and Angolans are warier of paying or receiving even small-scale bribes. Despite these efforts it is not yet clear whether Lourenço has sufficient political will to make the changes needed to roll back the damage caused by years of corruption and mismanagement under the dos Santos regime. Opposition figures have raised concerns that his actions are a way to consolidate power and pave the way to install his own authoritarian regime after the 2020 elections and there has been considerable pushback from the dos Santos family who remains hugely influential.

The jury remains out on whether this represents a watershed moment in the Angolan government’s appetite for reform. By the time of the 2020 elections, the extent of Lourenço’s determination to root out corruption, and the success of his financial reforms, should be plain to see.

A Proxy President

Joseph Kabila’s plans to maintain power

In August, president Joseph Kabila and the ruling Parti du Peuple pour la Reconstruction et la Démocratie (PPRD) backed Emmanuel Ramazani Shadary as the party’s candidate in the long awaited December 2018 elections in the Democratic Republic of Congo (DRC). The somewhat unexpected announcement ended prolonged speculation that the incumbent would seek an unconstitutional third term.

Kabila’s decision to step down has been welcomed both domestically and by the international community, who had criticised his “glissement” or “slippage” strategy, whereby he sought to artificially delay the end of his mandated presidential term. However, as a hardline Kabila loyalist, and with Kabila set to remain president of the ruling PPRD, it is unlikely that Ramazani will bring much change to the DRC’s political environment. Rather, the former minister of the interior is likely to do Kabila’s bidding, pressing ahead with efforts to increase mineral royalties and consolidate the political and economic grip of Kabila and his allies. The continuation of the status quo is unlikely to be popular with the country’s fatigued electorate and emboldened rebel groups.

“With his right-hand man in the president’s seat, and his ongoing role as head of the PPRD and ruling coalition, Kabila will retain significant influence after the elections.”

A new man for the job

Ramazani, a co-founder of the PPRD, is a prominent member of the DRC’s political elite in his own right. During a 20-year political career, he has served as the governor of mineral-rich Maniema Province, as well as president of the PPRD’s parliamentary group. Ramazani has proven his loyalty to the party, and the president, on numerous occasions. Due to his involvement, in his capacity as minister of the interior, in violently suppressing political protest, the US and European Union imposed sanctions against Ramazani in 2017.

With his right-hand man in the president’s seat, and his ongoing role as head of the PPRD and ruling Front Commun pour le Congo (FCC) coalition, Kabila will retain significant influence after the elections. There is ongoing speculation that Kabila may seek to become prime minister under Ramazani, which would enable him to seek a constitutional third term in 2023, without jeopardising his current levels of influence.

Will Ramazani win at the polls?

Although Ramazani’s loyalist credentials are unlikely to sit well among voters, Kabila appears confident of his candidate. The ruling administration has allegedly intervened to thin the ranks of his potential opponents. Specifically, prominent opposition candidate, Jean Pierre Bemba has been excluded from the candidate list, while popular former governor Moise Katumbi continues to be denied entry to the country, consequently missing the August deadline to register as a presidential candidate. This leaves Félix Tshisekedi at the helm of opposition leaders. Although voters could rally behind Tshisekedi in an “anyone but Kabila” campaign, there remains significant uncertainty over whether Tshisekedi will successfully increase the 19 percent of the vote which polls currently suggest he can secure by co-opting the likely disillusioned supporters of Bemba and Katumbi. Further, civil society groups have voiced their distrust in the credibility of the election process. This points to the likely dispute of the election results and claims of electoral fraud.   

A final postponement

There remains one final card Kabila could play to once again extend his time in office, without handing over the façade of control to Ramazani. While Kabila’s public acknowledgement that he would not contest the election increased the credibility of the election process, the elections still need to take place and Kabila has already demonstrated that he is willing to postpone the vote at the final hour. A further postponement of the election, be it due to logistical concerns, a lack of funds or even an increase in insecurity in conflict affected zones, all offer Kabila another opportunity for glissement. Some government critics have gone as far as to suggest the government is working with armed groups to increase rebel agitation to worsen insecurity in the country, and although this has not been verified, many still doubt whether Kabila will go through with the election.


It is clear that Kabila still has a prominent role to pay in the political future of the DRC. While this will likely bring policy continuity, including to the March 2018 mining legislation changes, uncertainty remains over how the electorate and the various rebel groups operating in the country will react. In this regard, the August confirmation of Ramazani’s candidacy has done little to allay security concerns; rather, it has served to increase fears over the ramifications of an unfair election. Such concerns include dealing with an administration headed by an individual under US and EU sanctions, increased corruption and the potential for worsening conflict in the DRC.