Model outlining the basic routes of China’s Belt and Road Initiative

According to reports by German insurance firm Allianz (via its credit insurance subsidiary Euler Hermes) assert that China’s financial capabilities are no longer enough to sustain the Asian giant’s investment framework in Africa. Due to this, the firm projects new investment opportunities for India and Japan on the continent.

One of the major initiatives that are expected to suffer from China’s reduced capabilities is the Beijing Belt and Road Initiative (BRI) which Africa is a part of. The initiative is China’s biggest connectivity campaign, meant to serve as a propellant of the nation’s global presence.

China’s economic activity slowing down is attributed as one of the factors behind the projected decline in investments. A fall in the growth rate of the economy from 7 percent (since 2010) to between 3.8 and 4.9 percent within the coming decade is expected, which would lead to reduced spending power.

Another factor that is going to influence the relationship China has with Africa is the current shift in economic models from an export driven economy to a more domestically-focused, “double-circulation” economy.

Angola, Egypt, Ethiopia, Ghana, Kenya, South Africa, and Zambia are going to be the countries most affected should Chinese investment in Africa hit a shortfall. Ethiopia is especially going to take a hit given that 15 percent of its investment needs rely on China.

India and Japan, however, can take advantage of this situation and provide the Asia-Africa Growth Corridor (AAGC) as a viable alternative to Africa’s investment needs. Currently, the AAGC exists only on paper with no significant steps taken to further its four focus areas; development projects, quality infrastructure and connectivity, skill development, and cooperation.

An incursion of the AAGC through India and Japan would also serve Africa’s political landscape besides its economy by showcasing the economic power that can be generated through cooperation with democracies and serve as a check to China’s political influence in the continent; a desirable outcome given the political woes the continent faces.


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