Follow SCMP, Earlier this month, Morocco became the first country to sign a plan to launch the Belt and Road Initiative, China’s largest infrastructure project.
The other four North African countries, Egypt, Libya, Tunisia and Algeria, have signed Memorandums of Understanding (MoUs) on the Belt and Roads, but Morocco was the first country to go one step further in announcing it. Details of the projects will be executed by them and China.
Moroccan Foreign Minister Nasser Purida said the initiative would “open up new opportunities for trade and investment and provide additional opportunities in line with the state’s new growth model.”
Observers say that while the deal was previously financially guaranteed, Beijing could not guarantee large sums of money, especially for large infrastructure.
Morocco is one of more than 50 African countries that have signed the Belt and Road Memorandum of Understanding with China, which includes Guinea-Bissau, Eritrea, Sவோo Tom and Prசிncipe and the Central African Republic.
In the past, when participating in the Belt and Road, countries expect to receive more capital from Beijing, from Chinese policy banks such as Exim Bank or the Bank of China, for large infrastructure projects. Development Bank (CDP). But now, these banks are demanding even more, and there is more stress on this continent as the credit crunch is gradually increasing.
SCMP Benjamin Barton, an assistant professor at the Malaysian campus of the University of Nottingham, was quoted as saying that the “early days” of reckless planning and extravagant spending were over because of the recession in the Chinese economy and Beijing’s introspective and conservative approach. It’s time to take a break. “
According to the professor, for China, Belt & Road’s focus is not on expanding implementation to increase funding scope for new projects, but on expanding “membership” to increase the legitimacy of the initiative. Since the Belt and Road is primarily designed to affect countries in the Southern Hemisphere, how much better are the African countries signing the MoU?
Meanwhile, Mark Polland, a senior expert at REDD Intelligence, said that Belt & Road was “exaggerated as a Chinese lending machine in Africa” and that there were no benefits to activating the source of membership. Finance New or more from China. China’s debt to Africa peaked in 2013, when the Belt and Road was announced, “he said.
According to him, Beijing signaled at the Sino-African Cooperation Forum (FOCAC) in Dakar, Senegal in November 2021 that trade finance and investment support would continue its official financial obligations to Africa in the direction of relying on Chinese equities. Big loans for infrastructure projects.
Kanyi Lui, an international financial lawyer at the Beijing-based law firm Pinsent Masons, also sees a shift from mere infrastructure projects. Advising on more than 100 overseas credit transactions involving Chinese lenders in energy, resources and infrastructure projects, Lou said China’s credit operations in Africa will focus on facilitating exports from the continent and providing liquidity to local banks.
During a meeting in Dakar, Chinese President Xi Jinping pledged $ 10 billion in trade financing and $ 10 billion in loans to financial institutions to support African exports. But how much funding is being given to bilateral projects in Africa? Shi did not say.
However, that does not mean that China will withdraw from the infrastructure in Africa, Mr. Louie said. “This is an area with China’s unique strengths and a large project structure developed over the last decade.”
He said commercial banks working with multinational lenders could play a more active role in funding these projects in the future. Liu said.