What do a railway line in Angola, 5,000km of roads in Zambia and the Yaoundé-Nsimalen motorway in Cameroon have in common? Answer: None of these projects will be carried out by Chinese companies. In August 2023, the Angolan government made official the $555m investment by European consortium Lobito Atlantic Railways for the concession of more than 1,700 km of railway line to transport minerals from the DRC to the port of Lobito.

In October, the American company Landlock Natural Paving signed a $725m contract to build a road network across Zambia’s 10 provinces. A month later, Cameroonian authorities took two Chinese companies off the Yaoundé-Nsimalen motorway, a construction project estimated at 380bn CFA francs ($621m), in favour of local company Buns and the French company Razel.

These examples illustrate the decline in Chinese investment on the continent.

‘Small and beautiful’ projects

In 2022, Beijing granted only nine sovereign loans totalling $1bn, compared to an annual average of 54 loans and $7.4bn from 2000 to 2021. This change of strategy was made official in 2021 at the Forum on China-Africa Cooperation (FOCAC), during which the Asian giant announced a reduction in its envelope from $60bn to $40bn over the next three years – “half of which concerns infrastructure loans”, according to a February report from the International Monetary Fund (IMF).

This downsizing was confirmed in mid-October at the Silk Road Summit, when Chinese President Xi Jinping said his country would be concentrating on “small and beautiful” projects of no more than $50m, focusing on digital technology and the environment.

The largest loan granted by the Chinese government in 2022 was for the preservation of the ecosystem in Senegal’s Ferlo region ($465m, more than half the amount of loans in 2022), according to Boston University’s Global Development Policy Center.

On the ground, however, Chinese companies have not deserted the huge projects they previously secured.

“Our Chinese partners have not warned us that they are scaling back their activities in Africa,” says Arnaud de Rugy, Africa director of Egis, a French consultancy, engineering and operating company. “We are involved in the infrastructure accompanying mining projects such as the Simandou project in Guinea, for a Capex [capital expenditure] in excess of $20bn, essentially provided by China.”

The opposite is the case in some places, De Rugy adds. “In countries with significant natural resources, such as Guinea and the DRC, it appears to us that China is still involved in major infrastructure projects.”

But the new “small and beautiful” strategy is the culmination of a long-standing debate, according to Thierry Pairault, Director Emeritus of Research at the CNRS and the École des Hautes Études en Sciences Sociales (EHESS) in Paris.

“Even before the pandemic, China was wondering whether it should continue to fund Africa at the same level as before,” Pairault tells The Africa Report. “The debt overhang of a number of countries on the continent has heightened Beijing’s concerns. China made the same mistake as the West and the USSR did in their day; it started from the simplistic idea that all you have to do is provide money to trigger economic development.”

Thin line between love and hate

African leaders have seized Beijing’s decision as an opportunity to emancipate themselves. Zambia, heavily indebted to China, and Angola were the third and fifth-largest recipients of direct Chinese investment on the continent in 2021.

This has not stopped the governments of the continent’s second-largest copper producer (Zambia) and third-largest oil producer (Angola) from rejecting their benefactor’s companies, burned by previous projects fraught with suspicions of corruption and poor workmanship.

“When China finances projects directly, the results are not very sustainable and are not always in the country’s best interests,” says one observer. African countries seem to have become aware of their power and ability to negotiate.

“Before, they thought that only Westerners and then only the Chinese could build a road or operate a mine,” says Pairault. “Now they realise that they can put all the players in competition with each other.”

The example of Cameroon is emblematic of the new power dynamic. Sinohydro and China Road and Bridge Corporation, two companies majority-owned by the Chinese state, were chosen to build the motorway between Yaoundé and Nsimalen before being ousted without any official reason.

This does not necessarily mean Beijing is on President Paul Biya’s hit list. “On the ground, we have not yet seen a withdrawal of Chinese companies from major infrastructure projects,” says Constantin Didier Medou, head of Medou, a firm specialising in public works engineering. On the contrary, the same Chinese company has been reappointed to carry out the second phase of construction of the Yaoundé-Douala motorway.

China First Highway Engineering Company (CFHEC), unlike its sister companies, received the authorities’ blessing. Why the mixed signals?

“It’s a question of national sovereignty and funding. In the first case, there was an opportunity to bring a national company into the deal. And in both cases, it was the projects that had already been financed that were favoured. Biya is skillfully playing on the China-West rivalry,” says a Cameroon watcher.

China builds, Europe pays

BPI France and Afriland First Bank, Cameroon’s leading bank, have acted as guarantors for the Yaoundé-Nsimalen corridor, while for the second project, the Cameroonian government has abandoned its initial public-private partnership (PPP) plan, deemed too costly, in favour of a direct agreement with CFHEC, the builder of the first phase.

The advantage of the Chinese company is that it is already on site and knows the project.

While African countries are increasingly avoiding projects financed by a Chinese sovereign loan to avoid any loss of sovereignty, this does not mean that Chinese companies are being sidelined. In the DRC, CFHEC won the tender in November for a project to protect Kinshasa’s commune of Kisenso from the risks of erosion and flooding.

The work, estimated to cost $23m, is being financed by the International Development Association, a fund managed by the World Bank Group and is a perfect example of the “small and beautiful” projects that Beijing wants to support in Africa. And it is paid for by the international community.

As in Tunisia, where the $268m in financing for the construction of the Bizerte bridge, awarded earlier this year to the Sichuan Road and Bridge Group, will be advanced by the African Development Bank and the European Investment Bank.