From February 27 to March 2, Sierra Leone President Julius Maada Bio paid a state go to to China on the invitation of Chinese language President Xi Jinping. It was the primary go to to China by an African president in 2024.
Our previous analysis exhibits that frequent, high-level visits to China by African leaders are sometimes correlated with stronger commerce and funding relationships with China. However how precisely does this occur? And can this correlation proceed, particularly with issues being expressed internationally concerning the state of the Chinese language financial system?
A more in-depth have a look at Bio’s go to final week offers some important clues.
Sierra Leone and China established diplomatic relations on July 29, 1971. Between 2009 and 2024, Sierra Leone’s presidents made six visits to China, above common in comparison with different African nations. Moreover, a mere 10 months in the past, Sierra Leone’s international minister, David J. Francis, visited Beijing. The frequency of Sierra Leone’s high-level visits clearly demonstrates that China is a precedence associate for the nation. There are a number of causes for this.
First, China is by far Sierra Leone’s largest export vacation spot. In 2021, Sierra Leone exported $341 million price of products to China. Sierra Leone’s second-largest export vacation spot was Belgium, which amounted to lower than half the worth ($161 million). This makes Sierra Leone one of many few African nations with a commerce surplus with China. In response to China’s Common Administration of Customs (GAC), in 2023 Sierra Leone earned $1.65 in exports for each $1 it imported from China. That mentioned, Sierra Leone exports primarily uncooked supplies to China, corresponding to titanium, iron and aluminum ores, adopted by wooden and diamonds, which ends up in the second cause why China is essential for the nation.
China can be Sierra Leone’s largest supply of international direct funding (FDI). For example, in 2021, China invested $106 million within the nation, in comparison with the United Kingdom’s $66 million and the United States’ $1 million. Nevertheless, like different buyers, to this point, Chinese language funding in Sierra Leone has centered closely on the mining of assorted minerals and iron ore processing.
Third, China’s lending for infrastructure improvement in addition to help for different sectors corresponding to livelihoods, healthcare, schooling, and agriculture has been a key space for collaboration from Sierra Leone’s standpoint. For instance, the China-Sierra Leone Friendship Freeway stays Sierra Leone’s sole fashionable expressway, enjoying a pivotal function in connecting the capital metropolis of Freetown with different main city facilities.
This third precedence, nonetheless, has not come with out challenges. For example, in 2018 a brand new airport venture was canceled by the incoming authorities (nonetheless incumbent at this time), particularly resulting from issues raised by the IMF and World Financial institution about Sierra Leone’s debt sustainability ranges. Nevertheless, new tasks using Chinese language financing and corporations have since been introduced, corresponding to a brand new bridge to the prevailing airport – the MOU for which was simply signed in late 2023 – which is anticipated to be accomplished by 2027.
And final however not least, Sierra Leone has been the chair of the African Union’s Committee of Ten (C10) on reform of the United Nations Safety Council (UNSC) ever since its creation in 2005. Since China is likely one of the 5 everlasting members of the UNSC, Sierra Leone is remitted to seek the advice of with China repeatedly on behalf of the African continent to strengthen China’s help for the African Union’s place on reform of the UNSC.
What about China’s curiosity in Sierra Leone? Simply over seven years in the past, in December 2016, China and Sierra Leone established a complete strategic cooperative partnership (CSCP). A CSCP is taken into account the best degree of bilateral relations for China, a place that solely 14 African nations maintain with China (the others are the Republic of Congo, Democratic Republic of Congo, Ethiopia, Gabon, Guinea, Mozambique, Kenya, Namibia, Senegal, South Africa, Tanzania, Zambia and Zimbabwe). There should be one thing particular about Sierra Leone – a rustic with the inhabitants dimension much like that of the Chinese language metropolis of Chongqing – from China’s standpoint as properly.
First, Sierra Leone is perhaps a small nation nevertheless it does have vital mineral assets. China has been making steps to diversify its sources of key mineral and vitality imports to reinforce resilience and vitality safety. For instance, Sierra Leone made two high-level visits to China in 2019 and 2023. Throughout this era, Beijing was working to scale back reliance on Australia’s iron ore exports, which is Sierra Leone’s key export to China. The 2019 go to resulted in a joint financial and technical cooperation settlementadopted by a noticeable improve in Sierra Leone’s exports to China, from $179 million in 2019 to $762 million in 2022.
Second, if influencing China on African positions on international governance is essential to Sierra Leone, the curiosity additionally runs the opposite approach. Sierra Leone’s management throughout the AU on UNSC reform makes it essential to interact with to elucidate Chinese language positions and views in addition to perceive African views.
These mutual historic pursuits apart, the important thing query stays as to what the longer term holds for the bilateral relationship, and what this additionally means for different African nations.
The principle distinction this time was Bio’s heavy give attention to diversifying funding.
The Bio administration has been working towards positioning Sierra Leone as a key international funding vacation spot, with an emphasis on Sierra Leone’s security and political stability. Key reforms have been launched to enhance Sierra Leone’s enterprise surroundings, together with fast-track procedures for enterprise registration and “one-stop companies” for potential buyers on the Nationwide Funding Board.
At a part of these efforts, Bio presided over an funding discussion board throughout his go to to China, which we attended. Sierra Leonean ministers made detailed shows on bankable tasks to Chinese language attendees from various sectors together with infrastructure, mining, ICT, manufacturing, and schooling.
Importantly, the shows referred to as for not solely investments in infrastructure and mining, but additionally in agriculture and agro-processing of palm oil, rice, sugar, cocoa, oil palm, poultry and seafood, all with a view to offering new jobs in Sierra Leone in addition to reducing poverty. Accordingly, the discussion board additionally referred to as for investments in schooling, coaching, and ability transfers.
That mentioned, and as we listened to those shows, a key hole that stood out was the shortage of demand for innovation from the African facet. For instance, there was no express push from Sierra Leone to climb up worth chains of its present exports to China and additional develop its manufacturing capability in these merchandise. And whereas Sierra Leone has duty-free entry to developed markets in North America and Europe in addition to China, there was little give attention to funding in agro-processing for exports to China – together with of merchandise that may require sanitary and phytosanitary (SPS) agreements, of which Sierra Leone at the moment has none with China.
However, Bio’s go to means that China’s urge for food for holistic engagement with Africa – from infrastructure to commerce and funding in addition to worldwide relations – stays sturdy, with no vital barrier posed by China’s home financial challenges. It additionally signifies that many African nations, together with Sierra Leone, are actively making an attempt to diversify their engagement with China. Will each side succeed?
With the ninth Discussion board on China-Africa Cooperation (FOCAC) quick approaching in late 2024, and with African nations working exhausting to get better from COVID-19 and different international shocks, African leaders will needn’t solely to take care of and diversify engagement, but additionally push Chinese language stakeholders to strive new approaches.
