I refer to Anver Versi's editorial (The G8's empty promises--African Business, June 2007 issue). He was right to be so sceptical about what the recent G8 Heads of State meeting in Heiligenndam, Germany, might achieve.
At the meeting, 'Growth and Responsibility' was the theme for discussions on Africa. The G8 leaders promised no new money but more meddling and lecturing for African countries. After the Heavily Indebted Poor Countries (HIPC) deal with its onerous debt relief conditionalities and prescriptions which precluded productive spending, rubber stamped at Gleneagles in 2005, it was clear that regulation not growth was what they had in mind for African HIPCs.
The only possible advantage of debt cancellation was wiping the slate clean and improved credit ratings allowing countries to borrow afresh and invest in serious infrastructure and development projects. But the G8's idea of 'responsibility' is to ensure only their decisions count and they had not cancelled debts, for HIPCs to start borrowing again.
The potential rise of China as 'lender of first resort' has fuelled anxieties among G8 leaders that debt cancellation has unwittingly provided African leaders with an escape mechanism from Western influence. Chinese lending and investment is widely seen as bypassing the rules that Western governments and institutions routinely impose on African countries. Furthermore, Ghana plans to issue bonds in the Eurobond market in July to raise upwards of $500m. Nigeria and other African countries look set to follow on the same path.
As Kenya's finance minister, Amos Kimunya, explained at the World Bank's annual meeting in Singapore, not only does China provide cash without strings, it also provides real goods, not just consultancy: "From my experience in Kenya, the kind of package we are receiving from China comes in with more effectiveness, almost 0% in technical assistance. It is all tangible. Infrastructure is tangible...