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[RwandaLibre] International Business Times UK: East Africa Railway Good News for Kenya and Africa But What's in it for China?

 

East Africa Railway Good News for Kenya and Africa But What's in it for China?

International Business Times UK - 2 hours ago

Photo: Rwanda's President Paul Kagame, Chinese Premier Li Keqiang,
Kenya's President Uhuru Kenyatta, Uganda's President Yoweri Museveni
and South Sudan's President Salva Kiir (L-R) pose after signing the
Standard Gauge Railway agreement in Nairobi.Reuters

The sight of a high-ranking Chinese official standing alongside
African leaders is becoming a familiar one. Pleasantries lead to talks
lead to photocalls. These are usually followed by press conferences
where a grateful African leader praises China's generosity, a Chinese
leader will stress the mutual benefits of the partnership, and both
sides will have a dig at old colonial powers' legacies in Africa.

The announcement that a Chinese bank will back a new railway venture
in Kenya was one of these occasions
. This particular project, to build a line connecting Kenyan cities
Mombasa and Nairobi, will cost in the region of $3.8bn (£2.3bn,
EURO 2.8bn.) The line will link to Kampala in Uganda, Kigali in Rwanda,
Bujumbura in Burundi and Juba South Sudan.

China's Eximbank will put up 90% of the costs, with Kenya covering the
remainder. What's more, a subsidiary of the Chinese Communications
Construction Co has been named as the main contractor.

The benefits for Kenya are obvious. Transportation costs are a crucial
issue, weighing down growth across most of East Africa. The Nairobi
government wants to bring those costs down.

Related

Chinese Premier Li Keqiang: No Strings to our Relationship with Africa

Kenyan president Uhuru Kenyatta said it would be the biggest
infrastructure project in post-colonial Kenya. There is no way that
Kenya could fund this kind of project without outside investment. It
simply does not have the cash flow.

As is the case with much of China's investments dealings across
Africa, there was no obvious sign of what China would gain.

Premier Li Keqiang told reporters: "The project demonstrates that
there is equal cooperation and mutual benefit between China and the
east African countries, and the railway is a very important part of
transport infrastructure development."

There is a naive assumption among some that China's African
investments are mere gifts without political strings attached, a rich
country sharing its considerable wealth with a less fortunate
continent.

Undoubtedly, the Chinese leadership is happy for that view to rise to
the surface but in reality, the Sino-African relationship is driven by
economics.

In the aftermath of Angola's civil war in 2002, China eagerly provided
vast amounts of finance to Africa's second largest crude producer. The
loans were backed by that very commodity that China, an industrial
powerhouse, desperately needed to grow its economy. The Chinese
premier visited the oil-rich state last week where a number agreements
were signed, but not disclosed.

While those deals have obvious benefits on both sides, the rail
project is not as clear-cut. It's a long-term investment, with
long-term returns. Like its dealings with Angola, China is most likely
to be looking at resources but in this case, over a longer period.

The construction will undoubtedly foster goodwill. With its vast
investment in media and now long-term infrastructure projects, China
is committing itself to the risky continent for decades to come.

A line linking five east African countries would make it easier for
China to gain access to resources across a vast area of the continent.
The Kenyan government has offered the Chinese something. Although it
is not clear exactly what that is at the moment, it will become clear
as the long-term relationship unfolds in the coming years.

http://www.google.ca/gwt/x?gl=CA&hl=en-CA&u=http://www.ibtimes.co.uk/east-africa-railway-good-news-kenya-africa-whats-it-china-1448279&source=s&q=East+Africa+Railway+Good+News+for+Kenya+and+Africa+But+What%27s+in

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