Sierra Leone cancels $300 million airport deal with China

Discussion in 'The Root' started by 3rdWorld, Oct 11, 2018.

  1. 3rdWorld

    3rdWorld Superstar

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    Sierra Leone cancels $300 million airport deal with China
    By Jenni Marsh and Ben Westcott, CNN

    Sierra Leone cancels multi-million dollar airport deal with China - CNN

    Updated 0903 GMT (1703 HKT) October 11, 2018




    [​IMG]

    Sierra Leone's President Julius Maada Bio (L) shakes hands with China's President Xi Jinping during the Forum on China-Africa Cooperation at the Great Hall of the People in Beijing on September 3, 2018.
    Hong Kong (CNN)Sierra Leone has nixed plans to build a controversial, $318 million airport outside the capital of Freetown with a Chinese company and funded by Chinese loans.

    The mega project, which was due to be completed in 2022, had been commissioned by the previous president Ernest Bai Koroma in March this year.
    Its cancellation comes amid cooling enthusiasm in both Pakistan and Malaysia for Chinese loans backing large-scale infrastructure projects in recent months. But Sierra Leone's decision is the first time an African government has canceled an already announced, major China-backed deal.
    "After serious consideration and diligence, it is the Government's view that (it) is uneconomical to proceed with the construction of the new airport when the existing one is grossly under utilized," said a letter from the country's Minister of Transport and Aviation to the project's director, published in local media.

    Speaking to the BBC on Wednesday, Sierra Leone's Aviation Minister Kabineh Kallon said the current airport would be renovated instead.
    "I do have the right to take the best decision for the country," he said. It's unclear if there are any financial penalties associated with canceling the deal.
    Foreign Ministry spokesman Lu Kang told reporters Thursday the cancellation didn't indicate any rift between China and Sierra Leone, claiming the project had only been in an exploratory phase.
    "When cooperating with African countries that include Sierra Leone, China has always adhered to the principles of equality-based consultations and win-win cooperation," the spokesman said.
    "I don't think this particular project should be overblown as an indication of problems between the Chinese and Sierra Leone governments."
    Politics at play
    Sierra Leone is one of Africa's poorest nations, and is rated by the International Monetary Fund as being at moderate risk of debt distress.
    Under former president Koroma, who was in office from September 2007 until April this year, the country took on $224 million of Chinese debt -- $161 million of which was racked up in 2016 alone, according to the Johns Hopkins SAIS China-Africa Research Initiative.
    [​IMG]

    China's President Xi pledges another $60 billion for Africa

    President Julius Maada Bio came to power in a hotly contested election several months ago, and has since reassessed some of the financial commitments made by his predecessor.
    The Mamamah International Airport deal had been controversial for years, partly due to the "lack of transparency" about its terms, according to Lina Benabdallah, assistant professor of politics and international affairs at Wake Forest University, North Carolina.
    The state-backed China Railway Seventh Group -- an experienced builder of bridges and highways across Africa -- had been contracted to construct the airport, with funding from China Exim Bank.
    "These re-negotiations are an important sign of African agency and rethinking the terms of deals signed between Chinese and African leaders," Benabdallah said.
    Sierra Leone will now upgrade its current airport in the town of Lungi, which has been criticized for its poor connectivity to the capital. Lungi is separated from Freetown by an estuary, which means a ferry ride is necessary to reach the city.
    The government is reportedly considering building a bridge to link the airport to Freetown.
    [​IMG]

    Sierra Leone's former president Ernest Bai Koroma with Chinese President Xi Jinping in Beijing in 2016.
    Debt-trap diplomacy
    Collectively, African countries owe China about $130 billion, according to the China-Africa Research Initiative, money which has mainly been used to fund transport, power and mining projects.
    At this year's Forum on China-Africa Cooperation (FOCAC) summit, a triennial meeting between Beijing and African heads of state, Chinese President Xi Jinping announced a further $60 billion in loans and aid for the continent.
    [​IMG]

    Skyscrapers, trains and roads: How Addis Ababa came to look like a Chinese city

    In August, 16 United States senators warned their government, in a letter to Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo, that "predatory Chinese infrastructure financing" was creating unsustainable levels of debt in the developing world, which the IMF was having to bail out.
    Much of the debt was due to extravagant spending in support of Xi's ambitious Belt and Road infrastructure program, which aims to build huge trade corridors linking China, Europe, Africa and the rest of Asia.
    China has been accused of operating a policy of debt-trap diplomacy, which could see Beijing pressure countries that can't repay loans into exploitative deals. In 2010, Beijing invested $1.5 billion in a Sri Lankan port. When the country couldn't repay its debt, the facility was signed over to a Chinese-state owned company on a 99-year lease.
    But some African leaders have been grateful for the investment the Chinese government has been providing.
    "China has become a major investor in our continent. As we look to expand Chinese investment in Africa, we need to encourage more local partnerships between Chinese and African entrepreneurs," South African President Cyril Ramaphosa said at the opening of FOCAC in September.
    CNN's Steven Jiang contributed to this article.
     
  2. Afro

    Afro Student of life Supporter

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    :weirdo:

    That is good that the new president is taking another look at all of these "deals"

    I really don't want to see the APR these countries signed themselves into :huhldup:
     
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  3. Triipe

    Triipe All Star

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    US AID or in this case China push insane loans for infrastructure onto many different nations. Then when the country inevitable cannot meet the financing requirements, the IMF swoops in and restructures their debt in a way that transfers mineral or natural resources to corporations.

    It's humanitarian lipstick on an imperialist pig
     
    Last edited: Oct 13, 2018
  4. ORDER_66

    ORDER_66 Aaron Jackson Part 2 & Aetheon and K'nuba 2018

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    finally some common sense!!! :wow:
     
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  5. For Da Bag

    For Da Bag Superstar

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    It's good that our brothers in Sierra Leone are making sound economic and financial decisions. I'm not saying don't work China, but make sure you benefit truly from the deal. At least be able to recoup your expenses in a timely manner.
     
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  6. greenvale

    greenvale All Star Supporter

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    Too bad my native jamaica couldn't have done this :mjcry:
     
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  7. mbewane

    mbewane Knicks: 93 til infinity

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    That's what has plagued Africa for decades :snoop:

    Was just listening to a couple Sankara speaches and he was saying all of this in the 80s
     
  8. Higher Tech

    Higher Tech R.I.P. Charlie Sifford

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  9. BlackJesus

    BlackJesus Come to me my sons

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    "Predatory loans" that Chinese banks offer African countries are just the countrywide version of the same basic "payday loan" schemes in poor neighborhoods. They take on debt and pay it off with future earnings from mines, power, etc.

    The Chinese can offer these shytty terms to these countries because they have POOR OR NO FINANCIAL STRUCTURES in place. No major banks, lending companies, venture capital firms, private equity etc. Just like the un-banked in poor neighborhoods.

    Banks get their money from SAVINGS. A country with no savings is a country with no capital. Which means you have to find people outside your country to invest in you.

    Instead of building with crappy chinese loans and workers, they should make the contracts TRAIN THEIR OWN NATIVE workforce, which eventually allow them to build their own infrastructure and stop relying on the predatory Chinese.
     
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  10. GASign

    GASign Pro

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    This needs to happen more.
     
  11. NoirDynosaur

    NoirDynosaur Elpollo Negro

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    Smart man. He realized that it was a debt trap.
     
  12. frush11

    frush11 Superstar

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    Good to see

    The Chinese been involved in too much already over there
     
  13. $cam-U-Well_Jack$on

    $cam-U-Well_Jack$on All Star

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    Exactly. This is a very important book which speaks to da above quote.
     
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  14. CoryMack

    CoryMack All Star

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    Walter Rodney’s ‘How Europe Underdeveloped Africa’ goes into this in detail. And they blew the man up with a carbomb to make him pay for writing it.
     
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  15. frankster

    frankster Rookie

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    As with all deals buyer(borrower) beware...

    I do not see Interventionist Policies or Gunboat diplomacy/Big stick Ideology being displayed by China, so it is hard to say African Nations are being forced by China to accept these loans. As a result I cannot agree that China is being imperialistic/Colonialist/Neocolonialist as in Walter Rodney great book or out to destroy nascent African economies as seen in Confession of an Economic Hit Man.

    Yes it can be seen as Predatory or a Debt Trap but it must be realize that these countries have the option to secure other financing, if they do not then it must be reasoned that either the leaders of the African countries are corrupt or they are being force to accept these by International Market Forces...in other words China is offering the best deal.

    Chinese Infrastructure Development Loans which are tied to minerals/flora reserves and the actual assets involved, there is usual no political or social attachments or requirements beyond using a certain percentage of Chinese Resources personnel and Companies. These loans are in general long term and competitive (Concessional) to high interest in many cases.

    Whilst European Structural Adjustment Loans are tied to political policy and socials developments which usually involves accepting Free market (privatization) systems and Fiscal (internal/local economic) restraints. These loans are in general short term and high interest in nature

    Given the above
    The responsibility lies in the hand of the African Nations to choose with whom to do business and to ensure that they get a fair deal....
    It is my opinion that the Chinese deal is far superior to the European - thus far and on the face of it

    Proverbs 22:7
     
    Last edited: Nov 29, 2018

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