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Infrastructure investments in the East-West Africa corridor: China’s master plan faces challenges

Infrastructure investments in the East-West Africa corridor: China’s master plan faces challenges

30th September 2014

By: In On Africa IOA

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Beginning in the early 2000s, China has taken a strong initiative to become an integral partner in Africa’s development. Infrastructure investments and increasing levels of diplomacy have brought Asia’s powerhouse closer to Africa with the intent to cut out Western influence altogether. One major development that has taken the continent by storm since 2012 is the East-West corridor from Kenya’s Lamu port to Cameroon’s Douala port, aptly named The Great Equatorial Land Bridge. The development of this initiative involves the construction of a transcontinental rail, road and oil transportation network which is to cut the time needed for the movement of goods from not only East to West Africa, but also from South and North America to Asia. This CAI paper discusses the challenges which China faces in the completion of this project in various states. The discussion reveals that the construction of the network will bring evolution to the region’s transportation and integration network. However, numerous issues loom tall over the project, including protests in Kenya, civil conflict in South Sudan, foreign influence in Central African Republic (CAR), and the growing threat of terrorism in Cameroon.

The initial start in Kenya

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The US$ 24 billion project commenced in early 2012 and was initially aimed at linking Kenya with South Sudan, while Ethiopia would be connected by a separate arm of the network: the Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPSSET).(2) In mid-2013 a consortium led by China Communications Construction Company won the first tender for the construction of three berths at Lamu port to the tune of US$ 484 million.(3) The contract was eventually signed in August 2014 and the project received the go-ahead.(4) As a continuation to LAPSSET, The Great Equatorial Land Bridge would begin at the Lamu port in Kenya, pass through Juba in South Sudan, Bangui in Central African Republic, and end at Douala in Cameroon.(5)

One issue that China has faced in making the LAPSSET project a reality has been a number of militant attacks on Kenya’s coast driven by Somalia’s al-Shabaab terrorist group.(6) This security issue is likely to drive up insurance costs and make it more expensive to do business depending on the number of firms competing for contracts. Another issue which China has to tackle is the growing discontent from indigenous communities that are being affected by the developments of the Lamu port. These two problems will have to be carefully addressed in order to get the project off to a good start. Furthermore, the involvement of highly-ranked individuals in the selling of property in close proximity to the port has raised speculation that the coastal conflicts have not been the sole result of al-Shabaab involvement but also that of political entities within the country seeking to gain influence and benefit from the project.(7) China will need to cooperate closely with the Kenyan government in order to ensure continued stability and peace in proximity of the project’s origin, both from a political as well as indigenous standpoint. Kenyan authorities have increased security in proximity to major airports and other locations,(8) however underlying issues as to why the security situation is becoming more tense need to be addressed in order to ensure prolonged peace.

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The challenges that China faces on the East-West road

China has been an integral investor in South Sudan’s oil infrastructure since its inception as an independent state in 2011. A clear sign of China’s intentions for South Sudan to be a key exporter of oil destined for China was an US$ 8 billion loan towards oil infrastructure development and roads, amongst other things, in 2012.(9) As South Sudan is a substantial role player in LAPSSET it is likely that China will also invest further from South Sudan’s side of the project in order to link it to Kenya’s network.

The ongoing civil conflict in South Sudan, however, poses certain problems to China’s master infrastructure plan. The fighting between the Nuer and Dinka tribal groups has put strain on South Sudan’s oil infrastructure and raised concerns that the country may spiral into a full scale civil war. This has pushed China to move away from its usual stance of non-interference and towards one of proactive engagement through diplomatic talks to end hostilities.(10) This has gone as far as United Nations peacekeepers being deployed at strategic oil infrastructure locations to protect Chinese interests as well as ensure that the oil continues to flow.(11) This highlights China’s aim to maintain stability of the oil infrastructure at all costs and ensure that there is also international consensus on its actions.

Foreign intervention by France in the CAR conflict of 2013 has left China with little room to manoeuvre in the ailing state. That year the new regime, headed by Michel Djotodia, suspended until further notice oil and mining contracts with Chinese companies while also inviting French forces into the country to help re-train the military.(12) The emerging power struggle pits the West against the East for control over CAR’s resources and strategic location as the key bridging point in the future Great Equatorial Land Bridge. Considering that France is already strained from its involvement in the revolution, the United States (US) has stepped in with assistance, thereby making it more difficult for China to exercise political influence and opening the door to neo-imperialist notions on the part of France as well as the US.(13)

However, the Asian giant has expressed hopes in the election of new interim leaders at the earliest possible date.(14) During the Bozize administration China National Petroleum Corporation (CNPC) was awarded rights to explore for oil in the north-eastern part of the country close to the borders with Chad.(15) Since the Seleka overthrow of Bozize, however, relations have been strained; China blocked US attempts to blacklist the former president and two other members of his cabinet, or any sanctions against the previous government.(16) Though current foreign influence is having an impact on relations, it is likely that once the new government of CAR irons out its policies, China will re-enter the picture with incentives for further cooperation. After all, CAR is an integral part of The Great Equatorial Land Bridge and without it there cannot be a link between the East and West Africa corridor.

Substantial investment in building Cameroon’s ports has been made. China Exim Bank has provided 85% of the US$ 567 million needed to upgrade the southern port of Kirbi, with the contract going to China Harbour Engineering Company.(17) The port is to act as a secondary outlet for heavy duty loads due to its substantial depth, unlike the port at Douala, which can only accommodate low-to-medium loads.(18) This will add to the trade flow capacity of Cameroonian ports and position them well for connectivity to The Great Equatorial Land Bridge.

Here China is positioned well to initiate further development inland with a transportation and road network. However, the growing Boko Haram cross-border insurgence has placed China in a tight spot in Cameroon. In May 2014, an attack on Chinese company Sinohydro, in northern Cameroon left one Cameroonian soldier dead and 10 Chinese nationals missing.(19) It is likely that the kidnapped workers will be used as bargaining chips by the militant group as was the case in a 2013 cross-border incursion in which a French family including four children were traded for US$ 3 million as well as the release of 16 Boko Haram prisoners held in Cameroon. It also shows that Chinese companies and workers may become a target for extremist groups as their involvement in the country grows.

Concluding remarks

The massive Equatorial Land Bridge project could provide a key connection between East and West Africa if it comes to fruition. China has already invested substantially in ports at both sides in Kenya and Cameroon, thereby laying down the foundations for transport infrastructure. Energy in CAR and South Sudan is aimed for export at these ports and there has been some progress made in South Sudan in building a road network to connect it to Kenya. However, if China is to seriously undertake the initiative there are a barrage of potential barriers that need to be dealt with, including domestic upheaval against the LAPSSET project in Kenya; the current civil conflict in South Sudan; foreign influence on the part of France, and to some degree the US, in CAR’s new government and the running of the state; and the growing threat of cross-border terrorism against Chinese companies and workers in Cameroon.

The approaches to each of these issues will be a key ingredient to the realisation of the Bridge. The terrorist threat looms in both Kenya and Cameroon; South Sudan is dug into a now-protracted civil disturbance with uneasy negotiations towards a resolution; and CAR has Western entities on the ground guiding decisions. China has already supplied Cameroon with more arms to combat Boko Haram while getting more and more involved in negotiations for peace in South Sudan. Kenya has made promises to stabilise the security situation in order to bring the LAPSSET project online. The only thing left to wait for is elections in CAR in order for China to re-enter the market.

Despite the challenges, what is clear is that China has taken certain steps towards closer ties with the states in question while also positioning itself better for continued cooperation. What remains to be seen, however, is how this will influence development in the future (Kenya, South Sudan and Cameroon are currently affected by civil disturbance and terrorism in part as a result of infrastructure developments which China initiated). China’s level of involvement in each country will likely determine the outcome of events and the project in the respective countries and, hence, of the realisation of the potentially transformative Great Equatorial Land Bridge.

Written by Ogi Williams (1)

NOTES:

(1) Ogi Williams is a Researcher at CAI with an interest in foreign policy, energy security, trade and governance. Contact Ogi through Consultancy Africa Intelligence's Asia Dimension unit ( asia.dimension@consultancyafrica.com). Edited by Nicky Berg. Research Manager: Claire Furphy.
(2) ‘LAPSSET: A peep at the East African trade corridor’, Ventures Africa, 10 January 2014, http://www.ventures-africa.com.
(3) See Jorgic, D., ‘Kenya says Chinese firm wins first tender for Lamu port project’, Reuters, 11 April 2013, http://www.reuters.com.
(4) See Mwangi, G., ‘Chinese firm signs $478.9 million Kenya Lamu project deal’, Wall Street Journal, 3 August, 2014, http://blogs.wsj.com.
(5) ‘Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPSSET) and Indigenous Peoples in Kenya’, International Working Group on Indigenous Affairs, 2012, http://www.iwgia.org.
(6) ‘Attacks affect East African trade hub’, 21 June, 2014, http://www.into-sa.com.
(7) See Analo, T. and Olouch, F., ‘Is $24b Lapsset project fuelling conflict on Kenyan coast?’, 2 August 2014, http://www.theeastafrican.co.ke.
(8) ‘Kenya enhances security at key installations amid terror threats’, Xinhua, 19 May 2014, http://en.chinagate.cn.
(9) See Taylor, A., ‘China just invested $8 billion in South Sudan’, 30 April 2012, http://www.businessinsider.com.
(10) See Fortin, J., ‘China in the middle: South Sudan’s biggest oil importer learns to wield its clout’, International Business Times, 9 April 2014, http://www.ibtimes.com; Jorgic, D., ‘South Sudan’s dwindling oil output forces China to step in to protect its investments from the ongoing rebellion’, The Independent, 5 June 2014, http://www.independent.co.uk; Tiezzi, S., ‘In South Sudan conflict, China tests its mediation skills’, The Diplomat, 6 June 2014, http://thediplomat.com.
(11) See Lynch, C., ‘U.N. peacekeepers to protect China’s oil interest in South Sudan’, Foreign Policy, 16 June 2014, http://thecable.foreignpolicy.com.
(12) See Gaist, T., ‘Pro-French Central African Republic coup leaders scrap Chinese oil deals’, 1 April 2013, http://www.wsws.org.
(13) See Lokongo, A.R., ‘French complicity in the crisis in Central African Republic’, Global Research, 21 January 2014, http://www.globalresearch.ca; ‘CAR is victim of West vs China fight for influence in Africa’, RT, 27 February 2014, http://rt.com.
(14) ‘China hopes Central African Republic will have new leaders soon’, AllAfrica, 13 January 2014, http://allafrica.com.
(15) See Aboa, A. and Ngoupana, P-M., ‘Central African Republic coup leader says will review resource deals’, Reuters, 29 March 2013, http://www.reuters.com .
(16) See Charbonneau, L. and Nichols, M., ‘Exclusive: Russia, China block Central African Republic blacklist at U.N.’, Reuters, 23 April 2014, http://www.reuters.com.
(17) See Tumanjong, E., ‘Cameroon’s $1bn China-funded port to boost West African cargo flows’, Wall Street Journal, 14 May 2014, http://blogs.wsj.com.
(18) See Nfor, M.K., ‘Chinese built port leaves Cameroonians adrift’, IPS News, 1 August 2013, http://www.ipsnews.net.
(19) See Martinez, M., Fombu, C. and Meilhan, P., ‘Boko Haram attack on Chinese firm in Cameroon; soldier reported killed’, CNN, 17 May 2014, http://www.cnn.com.

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