This month, the Chinese-constructed Nairobi Expressway opened to the Kenyan public to great fanfare. The toll road cuts the drive from the airport to the city center from 2 hours to 20 minutes, providing commuters with relief from Nairobi’s notorious traffic.
The project’s Chinese contractors — the China Road and Bridge Corporation (CRBC) — completed the project months ahead of schedule and just ahead of Kenya’s general elections, which are set to take place this August. This timing is no mere coincidence. The Mombasa-Nairobi Standard Gauge Railway (SGR) — built by the CRBC and financed by China EXIM Bank — similarly opened just ahead of the 2016 general elections and was key to President Uhuru Kenyatta’s reelection campaign.
China’s Belt and Road Initiative is often depicted as Beijing’s vehicle to export illiberalism. But Kenya’s SGR and the Nairobi Expressway projects showcase why democratic governments in the developing world have partnered with China to build their hard infrastructure. In Kenya, and other democracies such as Pakistan, Chinese contractors have been able to complete large-scale projects within election intervals, improving the odds that incumbents can return to office.
But the experiences of Kenya and Pakistan also make clear that working with China provides no shortcuts to sustainable development. And the speed of Chinese contractors has its own costs that recipient countries end up paying for in the future. Building infrastructure is the easy part. The real challenge is to leverage infrastructure to boost economic growth in an equitable and sustainable fashion and better compete in the global marketplace.
In the case of Kenya, special economic zones (SEZ) planned along the SGR route have lagged. Not a single SEZ has been made operational since the launch of the Mombasa-Nairobi SGR. The same goes for SEZs planned in Pakistan along the route of the China-Pakistan Economic Corridor or CPEC.
Pakistan’s story bears other similarities to that of Kenya. Electric power projects in Pakistan were completed well ahead of schedule in advance of the 2018 general elections. But since then, arrears to Chinese and other independent power producers have only continued to mount. And Beijing is now refusing to finance new development projects until those arrears are cleared. While Pakistan has surplus installed electric power capacity, that speed has come with a price. Electric power in Pakistan is expensive compared to regional peers, not just due to the tariff rates agreed to with Chinese companies, but also because of rampant line losses and non-payment of bills. A more prudent approach for Islamabad would have been to negotiate better rates and address the energy sector’s structural problems. But this more cautious path does little to titillate voters and presents fewer opportunities for enrichment for business, bureaucratic, and political elites.
Kenya’s leaders faced a similar choice with the SGR. Numerous assessments recommended refurbishing the existing meter-gauge rail line along the current alignment, which would provide Kenya a better bang for its buck. Now Kenya is stuck with a loss-making SGR and it is forcing the freight industry to use transport goods by train rather than road. At the same time, China has balked at financing the extension the SGR into Kenya’s neighbors, though the fiscal viability of its line was predicated on the expansion of the network into the region.
Africa and the broader developing world face huge infrastructure deficits, which are compounded by rapid population growth. Their urgency is understandable. By 2050, Africa will be home to three of the world’s ten most populated countries and some of the world’s most populated cities. Those numbers are projected to surge even more into the end of this century, as the populations of Kenya’s neighbors Ethiopia, Tanzania, and Uganda swell.
But development — both in terms of projects as well as a process — extends beyond electoral timelines. A slower, more cautious approach – like choosing to upgrade of existing infrastructure instead of constructing new greenfield projects – may in the end be necessary given China’s shift toward more restrained lending practices. Beijing and recipients of its aid and financing can use this moment to recalibrate and pursue a more responsible approach toward development, focusing on building human capital and improving export competitiveness and productivity. That may result in less flashy big-ticket infrastructure, but sustainable and equitable growth for fast-growing populations in the developing world.
Updates on the China-Pakistan Economic Corridor and Belt and Road Initiative.