China’s Trade with Africa: What Are the Challenges and Opportunities?
September 28, 2022
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SALON DESCRIPTION:
In the early 2000s, China devised a seemingly innovative infrastructure financing model that enables resource-rich but cash-strapped African countries to use proceeds from oil, diamonds, and other valuable resources to back loans for critical infrastructure development projects.
But 20 years later, that model, known as Resource-Financed-Infrastructure (RFI), raises critical questions. For instance, to what extent has it helped African countries to close the infrastructure gaps? Second, considering that the prices of natural resources are volatile, how might this model disadvantage African countries? Could it inadvertently create a debt trap for African countries? Finally, how might good governance and transparency help African countries to better structure RFI deals and gain higher returns for their resources?
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