China’s African resource-for-infrastructure deals face growing concern that locals don’t feel the benefits
- Critics of the agreements say the promised benefits such as new Chinese-built roads, power plants and schools have failed to materialise
- Deals in the DR Congo and Ghana have also been criticised for their environmental impact as well as being poor value for the host countries
Kinshasa maintains that it has not benefited much from the arrangement but Beijing says it has built several projects in the Central African nation despite obstacles, including a lack of power to develop the mine.
In exchange, Ghana would use money earned from the sale of bauxite – the main ore used to make aluminium, refined bauxite and aluminium to repay the loans. As collateral, Ghana agreed to establish an offshore escrow account for receiving revenues generated from the sale of bauxite.
According to a study in June by Luis Scungio, a corporate accountability researcher and adviser at the Centre for Research on Multinational Corporations, such deals “reflect the underdeveloped economies of some host countries that have significant natural resources, along with a need for roads, power plants, schools and other infrastructure”.
The study said China lacked natural resources but was very experienced in construction. It also said China had signed similar deals in the 1980s when Japan needed raw materials and oil from an underdeveloped China.