Volume Number:1 Issue 10

Document Size:12 pages

Within
the past decade, China has financed infrastructure projects worth USD 28
billion in Africa (World Bank, 2013). In fact, from 2001 till the end of 2011,
around 10 major RFI deals were either completed, or at the implementation stage
in eight African countries: Angola, Congo-Brazzaville, Democratic Republic of
Congo (DRC), Ethiopia, Gabon, Sudan, Nigeria and Zimbabwe, with a combined
financial value of approximately USD 22 billion (Davies, 2010; China-Africa
Economic and Trade Cooperation 2013; and Konijn, 2014).

The
most attractive attribute of Chinese RFI loans for African countries is the
competitive interest rates and no-strings attached conditions provided by RFI
swaps. On the part of China, RFI loans provide a way to secure export markets
for Chinese goods and services, given that the approval of RFI loans by Chinas
EXIM bank is tied to the purchase of around 70 per cent of Chinese goods and
services. Thus, the use of RFI loans in Africa actualizes Chinas economic
objective of export promotion and the foreign policy of non-interference.