A new study conducted by Boston University’s Global Development Policy Centre and the African Economic Research Consortium suggests that China should redirect its economic engagement with Africa towards supporting the continent’s energy access and transition objectives.
Published this month, the study analyzes two decades (2000-2022) of economic relations between China and Africa, emphasizing the need for a fundamental shift in the nature of the relationship to align with the United Nations’ 2030 Sustainable Development Goals and the African Union’s Agenda 2063.
Moses Oyintarelado, a data analyst at Boston University’s Global China Initiative, advocates for future Chinese economic engagement in Africa to prioritize financing for electrification projects and renewable energy technologies, leveraging Africa’s abundant primary commodity inputs.
Historically, the interaction between Africa and China has been characterized by Africa exporting primary commodities in exchange for finished goods from China. However, the study reveals that China has become the leading trading partner for many African countries, with total trade between the two partners witnessing significant growth from US$11.67 billion in 2000 to a peak of US$257.67 billion in 2022.
While China has provided substantial development finance to Africa over the past two decades, the majority of funding has been allocated to fossil fuel projects, with renewable energy projects receiving minimal support despite Africa’s vast potential in solar power.
The study also highlights the challenge of Africa’s increasing debt to China, which accounts for 13% of the continent’s total external debt as of 2022. Despite this, Chinese investment in Africa has predominantly focused on industries such as energy, mining, and processing, with a bias towards fossil fuel projects.
To address current development objectives related to energy access and transition, the study recommends that China and African countries prioritize concessional loans, equity finance, and trade aimed at renewables and value-added green industries.
Dianah Ngui, the Collaborative Research Manager at the African Economic Research Consortium, emphasizes the importance of coordinating trade and industrial policies in Africa to ensure that the continent benefits fully from renewable energy technologies.
In order to achieve universal energy access and meet Sustainable Development Goals in Africa, significant investment will be required, with estimates suggesting a need for US$2.3 trillion over the next six years. This includes investments in solar, hydro, wind, and geothermal energy to harness Africa’s renewable energy potential.
The study underscores the urgency of ramping up investment in clean energy infrastructure to address the continent’s energy access challenges and achieve sustainable development goals.
