The upcoming Forum on China-Africa Cooperation (FOCAC)

Source: The post the upcoming Forum on China-Africa Cooperation (FOCAC) has been created, based on the article “Dealings at a China-Africa forum that India must track” published in “The Hindu” on 3rd August 2024 

UPSC Syllabus Topic: GS Paper2- international relations- Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests  

Context: The article discusses the upcoming Forum on China-Africa Cooperation (FOCAC) and Africa’s need for better strategic planning and negotiation. It highlights African priorities, including trade, agriculture, and debt issues. It also suggests lessons India can learn from Africa’s approach to China for its own engagement with the continent. 

For detailed information on A new chapter in India-Africa ties read this article here 

What is the Current Context of FOCAC 2024? 

1. The ninth Forum on China-Africa Cooperation (FOCAC) is set for September 4-6, 2024, in Beijing.
2. African nations are dealing with high inflation, currency depreciation, and a heavy debt burden.
3. Geopolitical challenges include the Israel-Hamas and Russia-Ukraine wars, and Houthi attacks on commercial shipping in the Mediterranean.
4. African leaders feel “summit fatigue” after recent Africa+1 summits with Türkiye, Russia, South Korea, and the U.S.
5. Adopting the Banjul format (15 countries plus the African Union Commission) is suggested for better management.
6. The effectiveness of FOCAC depends on Africa’s ability to set the agenda and take ownership of its strategic planning.

What are the Priorities for Africa at FOCAC 2024? 

1. Trade Expansion: Africa aims to increase exports to China. As of July 2024, China-Africa trade reached $167 billion, with African exports at $69 billion. However, most exports are raw materials.
2. Agricultural Development: Africa needs to build a sustainable agriculture sector. China and India can help with crops, fertilizers, and tools suited for African conditions. Processing agricultural products locally is also crucial.
3. Green Energy and Industrialization: Africa seeks to establish refining and processing hubs. Zimbabwe, for example, requires Chinese companies to refine lithium locally. However, electricity shortages and environmental issues are challenges.
4. Debt Management: Addressing debt sustainability is key. China accounts for 12% of Africa’s public and private debt. African countries need transparency and better negotiation strategies.
5. Strategic Engagement: Africa must develop a coherent strategy and harmonize positions before the FOCAC summit to drive the agenda effectively.

What is China’s Role in African Debt? 

1. China’s loans to African governments and institutions totaled $170 billion between 2000-2022.
2. Chinese lenders hold 12% of Africa’s public and private debt, making them a significant but not the main creditor.
3. A 2022 AidData study shows half of Chinese loans to sub-Saharan Africa are not disclosed in sovereign debt records, raising concerns about transparency.
4. China is unlikely to forgive large debts but may write off small, interest-free loans.
5. Despite the disputed narrative of “debt trap diplomacy,” some Chinese lending practices require closer scrutiny.

What Lessons Can India Learn from Africa’s Engagement with China? 

1. Continuity in Engagement: India should maintain regular dialogues with Africa, similar to how FOCAC is a recurring event. The last India-Africa Forum Summit (IAFS) was in 2015, so IAFS-IV should be held soon to maintain momentum.
2. Industrial Support: India can help integrate African economies into global value chains by investing in agriculture, pharmaceuticals, and manufacturing. Indian companies should focus on farm mechanization, food processing, and cold storage to create jobs and reduce food wastage.
3. Innovative Financing: Africa’s caution about new loans post-COVID-19 underlines the need for innovative financing methods. India could employ mechanisms like public-private partnerships and blended finance to assist African projects without increasing debt burdens.
4. Digital Tools for Connectivity: Using digital technologies like UPI, which have been successful in Mauritius, can enhance financial transactions and connectivity between India and African nations, potentially extending to more countries in Africa.

Question for practice: 

Examine how Africa’s strategic priorities at FOCAC 2024 reflect its current economic and geopolitical challenges.