China's aid to Africa comes under spotlight

Updated 22 July 2012
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China's aid to Africa comes under spotlight

Two main features characterize China's new aid program to Africa — its volume that amounts to $20 billion over the coming three years, almost double what it gave during the past three years. Besides, it has a different focus this time of targeting grassroots as it plans training 30,000 Africans, in addition to 18,000 scholarships and sending 1,500 of medical personnel to work in various African countries.
Is it a change in focus from “we give you what we want,” as Beijing's approach has been described in the past, to prevailing emphasis on “African needs”? It is not clear yet and all depends on actual performance on ground.
Still Chinese aid emphasizes work on infrastructure projects and some $15 billion are being spent on things like roads, dams, power etc, where the need is great, not on the level of each country, but such projects sometimes help boost chances for regional cooperation and eventually on parts at the continental level.
The issue of China's aid to Africa came under spotlight last week, as Chinese leaders headed by Hu Jintau hosted their fellow Africans in China-Africa Forum. Though with little presence of African leaders unlike what happened back in 2009, partly due to the timing that clashed somehow with the African Union summit and its aftermath, but the presence of South Africa's President Jacob Zuma gave the meeting a new dimension.
In his speech Zuma warned that Chinese African relations continue to be unbalanced and that situation is not sustainable in the long run, but the striking feature of this unbalance is that it favors Africa. Total volume of trade is estimated to have reached $ 166 billion last year, which underline the significant presence of raw materials produced in Africa and shipped to meet growing Chinese needs.
The problem with Zuma's complaints is that it contradicts the general impression that unbalanced trade results in the metropolitan having the upper hand and that African trade balance paints a red color.
But that is not the case and probably sensing this perception, China is giving more emphasis this time on grassroots and social development in areas of training, health services and providing scholarships to young Africans. Moreover, they add that while typical western aid spends some 80 percent on their staff and importing needed material from back home, while the Chinese spend more than 90 percent of the cost on the project itself inside Africa. All this gives Beijing an edge on its Western competitors.
On the other hand, the Chinese were the first to group African countries into one forum to discuss bilateral issues of the whole continent under one roof, a precedent that was copied by others. Such approach follows the steps of the trend that tries to project the continent as a one entity. The change from the Organization of African Unity to that of the African Union with its various commission and push for a more integrated approach between its member countries is a landmark in this trend. Moreover, Beijing feels somehow indebted to Africa's push as a continent to support China's diplomatic offensive to regain its seat at the United Nations.
Yet it is hard to see how such approach is beneficial to either China or Africa, the continent as such. Though problems of under development are general and are affecting each and every country but in the end problems, needs and aspirations of Ghana differ from those of Zambia or Ethiopia.
Still Zuma's remark carries with it some inherited feelings from the colonial era. Though China has no colonial history in Africa as the case with Europe in general and both England and France in particular, but the reference in fact is pointing to the sense of exploitation that was and continues till today.
The colonization phenomenon was intended basically to expand markets before growing capitalism and ensure supplies of raw material to the growing and hungry needs of the industrial revolution that has engulfed Europe.
The bottom line in the issue of unbalance exceeds the volume to the content. Regardless of the volume of Africa's exports to China, it remains in the form of raw materials, with no added value and as such it means a subtraction at the expense of the continent's resources and future generation.
But it is hard to square the blame for that on China exclusively. Since the wind of change blew throughout Africa almost have a century ago, African countries have taken their destiny into their own hands but this period is characterized by mismanagement, corruption and lack of transparency, which are byproduct of lack of political stability, civil wars and loss of direction politically and economically.
It is easy to complain accusing colonialism in the past and the new powers like China now, but the fact remains that charity must start at home. Africa needs to put its own house in order first before looking for escape goats.
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Kuwait to boost Islamic finance with sukuk regulation

Updated 11 min 26 sec ago
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Kuwait to boost Islamic finance with sukuk regulation

  • The move supports sustainable financing and is part of Kuwait’s efforts to diversify its oil-dependent economy

RIYADH: Kuwait is planning to introduce legislation to regulate the issuance of sukuk, or Islamic bonds, both domestically and internationally, as part of efforts to support more sustainable financing for the oil-rich Gulf nation, Prime Minister Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah said on Wednesday.

Speaking at the World Governments Summit in Dubai, Al-Sabah highlighted that Kuwait is exploring a variety of debt instruments to diversify its economy. The country has been implementing fiscal reforms aimed at stimulating growth and controlling its budget deficit amid persistently low oil prices. Hydrocarbons continue to dominate Kuwait’s revenue stream, accounting for nearly 90 percent of government income in 2024.

The Gulf Cooperation Council’s debt capital market is projected to exceed $1.25 trillion by 2026, driven by project funding and government initiatives, representing a 13.6 percent expansion, according to Fitch Ratings.

The region is expected to remain one of the largest sources of US dollar-denominated debt and sukuk issuance among emerging markets. Fitch also noted that cross-sector economic diversification, refinancing needs, and deficit funding are key factors behind this growth.

“We are about to approve the first legislation regulating issuance of government sukuk locally and internationally, in accordance with Islamic laws,” Al-Sabah said.

“This enables us to deal with financial challenges flexibly and responsibly, and to plan for medium and long-term finances.”

Kuwait returned to global debt markets last year with strong results, raising $11.25 billion through a three-part bond sale — the country’s first US dollar issuance since 2017 — drawing substantial investor demand. In March, a new public debt law raised the borrowing ceiling to 30 billion dinars ($98 billion) from 10 billion dinars, enabling longer-term borrowing.

The Gulf’s debt capital markets, which totaled $1.1 trillion at the end of the third quarter of 2025, have evolved from primarily sovereign funding tools into increasingly sophisticated instruments serving governments, banks, and corporates alike. As diversification efforts accelerate and refinancing cycles intensify, regional issuers have become regular participants in global debt markets, reinforcing the GCC’s role in emerging-market capital flows.

In 2025, GCC countries accounted for 35 percent of all emerging-market US dollar debt issuance, excluding China, with growth in US dollar sukuk issuance notably outpacing conventional bonds. The region’s total outstanding debt capital markets grew more than 14 percent year on year, reaching $1.1 trillion.