Chinese President Xi Jinping is visiting Africa this week, meeting with President of South Africa Matamela Cyril Ramaphosa and co-chairing the China-Africa Leaders' Dialogue. During his visit, Xi emphasized "China-Africa unity and cooperation". What's the outlook for trade relations between China and the continent? How do African countries view Chinese investment, lending, and telecommunications, in the face of growing western concerns? China Trade Monitor recently sat down with African economist Bogolo Kenewendo to talk about these issues.

Kenewendo previously served as the Minister of Investment, Trade and Industry of Botswana, and is now the Managing Director of Kenewendo Advisory.

CTM: According to official Chinese data, China's trade with African countries has been growing steadily in recent years, and Chinese Minister of Foreign Affairs Qin Gang said recently that China will continue to expand trade with Africa. Which sectors do you think have the most potential for growth?

Kenewendo: I think at the moment, every sector is an opportunity for both [Africa and China], and for trade, and particularly as the continent prepares itself for increasing intra-Africa trade and the AfCFTA. There has been growth of the Chinese manufacturers setting up in the continent, positioning themselves, adding value within the continent, such that they can trade within the continent. You would recall that some issues around the BRI, and some of the funding that was prepared during FOCAC, was to also facilitate industrial growth within the continent. It facilitates direct trade, and it also facilitates industrial growth within the continent through the use of Chinese skills and some Chinese businesses. So the opportunity here is in the trade of services, the trade of skills, to set up in the continent to drive actual goods manufacturing and goods trading within the continent.

Now across the seas, one area that has been very topical is in the health space. And this was particularly brought up by Vera Songwe, former Executive Secretary of the United Nations Economic Commission for Africa with COVID, so the manufacturing and production of protective equipment, health equipment, lab equipment, and the skills that are necessary in order to drive that. This in particular has been noted as a priority trading and development area between China and Africa.

CTM: What do you think is the biggest barrier for African exporters who want to sell to China?

Kenewendo: One of the issues in trade to China: There are a lot of new regulations. Many African countries are used to SPS and trade regulations related to Europe or the United States. And so, going to China is a whole new area and space of SPS relations that they must adhere to.

So far Botswana has been trying to export beef to China, and we need to prepare ourselves more than what we already prepared our industry for to tap into the European market. It is not necessarily that they are obscenely difficult regulations to meet. It's just that every time you add a new layer of regulation, it's more expensive on the industry, and it challenges the viability of the industry.

The second one -- and this is not necessarily a trade regulatory issue, it's more of a size issue -- when a small country like Botswana wants to tap into the Chinese market, the demand in tonnage is a lot heavier than the demand in tonnage that Norway needs. Thus there is a need to be prepared to meet that demand; otherwise the industry deems you unreliable, which then also challenges the credibility and integrity of your export sector. So that is something that I would highlight as a challenge that we saw when we were preparing ourselves to tap into the Chinese market.

For the trade coming from China into the continent, again, I just want to focus on the health side. One of the issues that has been raised quite often is the varying standards that have been set across the continent. So there is no unifying standards for products that just allows the entry of Chinese products into the continent at different stages of manufacturing.

When we look at health, for example, the question was, if a product has been certified in China and then pre-certified in Kenya, would it be easy to have it trading within the continent, maybe sent to South Africa? And then the challenge is known, because the standards are different and we haven't yet worked on these varying standards, which I think are important as the continent readies itself for the AfCFTA.

CTM: You mentioned the BRI. How do African countries view Chinese investment and infrastructure nowadays? Are they taking a more cautious position because of the political tensions between China and some western countries, or because of issues such as loan sustainability? Have the growing negative views of western countries toward China affected how African countries view the BRI?

Kenewendo: I think this has been such an interesting conversation in the last three to five years of Chinese investment, Chinese loans that are causing fiscal instability in the continent and so forth. As President Geingob rightfully responded, we're looking for partners. The continent is looking for partners who will finance development.

So I don't think that at this point we are seeing a lot more countries being cautious against Chinese investment. Rather, I think we're seeing a lot more countries being cautious on their level of debt, and their fiscal sustainability, especially those countries who have already been put in a more vulnerable position due to COVID, and they now have to think a lot more strategically about how they stay afloat.

I think the issue around debt sustainability should be dealt with more holistically. There are issues with the concessional rates that have been given by MDBs and NFIs, and issues with how the bilateral lending structures have run. I don't think it's necessarily about China in itself having done this. If we are being honest, Chinese lending, both private and public, only account for about 12 to 15% of African country's debt, and that is not as monstrous as people have made it seem to be.

At the moment, what we should be looking at is: Given the trilateral crisis that we're in, and the polycrisis that we're in, how do we manage the debt issue now, and how do we ensure that lending for the future is sustainable and responds adequately to the crisis?

I read somewhere, and I think it was President Kagame said, this narrative that bilateral negotiations on debt with China is the reason why African countries are over indebted is actually shortchanging the intelligence of African leaders. [This narrative] implies that African leaders do not have the cognitive ability to make a decision on how they attract investment or lending or financing. Issues of Zambia are not solely because of the debts that they have with China. The issues are also because of historical debt that it has with other countries and with the MDBs.

In addition, we should think about why it is that Chinese investments have become more attractive, why is it that when countries are looking for development financing, they run to China? It is the speed of financing that accommodates the projects that want to be done in a timely manner.

CTM: Do you see different views toward Chinese lending across the continent? And what is driving these varying views?

Kenewendo: There are certainly different views at this moment about how predatory lending from China is, and the terms that come with it, terms that include labor manpower, exclusivity of companies that run the projects, and implement projects domestically.

For Botswana, we've been clear that a loan doesn't come with terms of who we should employ; it doesn't come with terms of where we should get material. If you give us a loan, then we go through a competitive bidding process in order to get the best person or best company to deliver a product or project.

We have always had varying terms for Botswana, and I know a few other countries have also managed to negotiate. In other countries, it's not the same, and that is why some countries would see Chinese investment not as favorable because of the terms that come with Chinese lending. I think it's all about the negotiation capability of countries.

And sometimes it's also about the level of desperation of finance. The level of desperation for finance will also determine what it is that you are able to negotiate.

Right now, there is a level of desperation for development that I think most of our partners haven't really come to terms with. There's a level of desperation for jobs; there's a level of desperation for the provision of basic services. And many leaders have to think about how they are going to provide and reduce that level of desperation and inequalities. And they think about where to get the money. As some have adequately said it: It's about who will support our desire for development. We are not choosing if it's in the west or in the east, but we welcome all the partners.

If increased Chinese lending and investment makes the U.S. want to also start a $60 billion fund to support African development, it's a very welcome development. And if it challenges the EU to start a Global Gateway platform that will potentially create $380 billion worth of investment in health and in energy, then that is also a welcome development.

CTM: My next question is about telecom: How do African leaders and the general public think about using Chinese firms and products for the telecom infrastructure? Do you have similar concerns about Chinese products when it comes to privacy surveillance, cyber attacks, as in many Western countries?

Kenewendo: Many African countries, I remember, had signed agreements with Huawei. At this point, there's still openness to partnership with either US, European and Chinese based technologies. We have Huawei providing some technical support in surveillance and vigilance within especially metropolitan areas for some countries, and they've offered that support and that support has been welcomed. I think some intelligence issues are still being taken into consideration, particularly for those countries that may have bases of U.S. or European armies.

But the No.1 mobile phones in the continent by quantity is TECNO, and it is made in Shenzhen, China. They are very cheap smart phones. And the most popular phones that are easily used and are affordable in the continent are Chinese.

So it may not be about who runs the towers. We should also think about who actually provides the appliances. The fact is, the usage of smartphones in the continent is driven by Chinese products. So if indeed there's a threat of cyber security in the continent from the Chinese, it doesn't matter if we agreed to having a Chinese service provider. If they wanted to, they could, through the use of the mobiles that we have.

Yes, countries are very cautious. Now they're coming to terms with the kind of cybersecurity laws and protection they must have in place. And they're thinking about the kind of providers they should have in place. But we shouldn't just think about that macro level. We should also think about the micro level, at the consumer level, because there is already a high penetration of Chinese made products in the continent.

CTM: My last question is about geopolitics: How do African countries see the competition between Chinese and Western companies/governments in building a closer relationship with Africa? Do they feel forced to pick a side, or do they see opportunities?

Kenewendo: Yes, it's time for the continent to bask in the sun while it shines, and make the decisions that matter for developments in the continent. I think it's not necessary to choose, but I do know that within the geopolitics and power there might be expectations for choice. But I think African countries and leaders must make decisions that matter and that promote development for their countries.

CTM: Do you have any concluding remarks?

Kenewendo: There are currently contentious issues in debt sustainability and the general global financial infrastructure. The continent needs everyone to come to the table to deal with these issues, it’s not a time to pick and choose who to relate to but to strengthen a consolidated position on development, debt and access to finance & investment as priority.