This June, Senegal’s president, Macky Sall, proudly commissioned the construction of the Diamniadio National Datacenter, about 30 kilometers outside the capital city, Dakar. Sall said the West African country would move all government data and digital platforms from foreign servers abroad to the new center, in a move to boost Senegal’s digital sovereignity. The 506- square-meter facility, which cost 46 billion CFA francs ($18.2 million), was underwritten by a Chinese loan and built by Huawei, which is providing equipment and technical support.
For some observers, declaring Sengalese digital sovereignty, enabled and funded by China, can sound like a contradiction in terms. But it’s really just one facet of a wider issue captured by the deepening tech-telecoms relationship between China and nearly every African country over the past two decades and, crucially, what it portends for the economic future of the continent.
This week, those debates were front of mind for analysts, diplomats, and tech leaders with Dakar as the backdrop for the triennial Forum on China-Africa Cooperation (FOCAC), the most important engagement platform between Chinese and African leaders. Dakar’s roads were lined with billboards featuring images of president Sall and Chinese president Xi Jinping, welcoming dignitaries from China and across Africa, though Xi, who has not left the country since the beginning of the pandemic, will not be there this year.
In 2018, FOCAC culminated in a total $60 billion promise by the Chinese to back numerous major infrastructure projects across Africa, with a mix of loans and grants underwritten by Chinese financial institutions, including the Export-Import Bank of China. It was all seen under the auspices of China’s ambitious Belt and Road Initiative (BRI), to build roads, bridges, and ports across the world, fully connecting China to the global economy via a modern-day Silk Road.
But it is the evolution of the “Digital Silk Road,” a term coined by Xi in a 2015 state white paper, that has quietly become a contentious topic for China-Africa watchers. The Digital Silk Road (DSR) includes everything from cross-border e-commerce, smart cities, and fintech apps through to big data, internet of things, smartphones, and undersea cables. These projects don’t grab headlines like shiny new Chinese-built airports and railways or spark panicked fears of China’s “debt trap diplomacy.” But the unfettered influence of Chinese firms developing every step of the digital ecosystem in nearly all African countries has become a growing point of concern, particularly for China’s rivals in the United States.
As Motolani Agbebi, a researcher at Tampere University in Finland, told Rest of World, significant Chinese involvement in Africa’s telecoms sector actually predates DSR. Between 1999 and 2001, Huawei and ZTE first started working consistently on the continent, supported by China’s “go out policy,” which promoted the internationalization of Chinese companies.
But the ongoing pandemic, which has forced African governments and their citizens online to participate in remote work, schooling, and delivery of government services, has underscored Africa’s dependence on Chinese tech. “There’s no doubt that technology infrastructure and the broader Digital Silk Road initiative are far more important to China today in regions like Africa than they were even just a few years ago,” said Eric Olander, managing editor of The China Africa Project.
Meanwhile, big physical infrastructure projects, such as railways and airports, enabled by huge government debt, are coming under increased scrutiny both at home and abroad.
“Many of China’s partners in Africa are encountering financial difficulties to borrow more for the types of large transport and energy projects we saw in BRI’s first phase,” Jonathan Hillman, author of The Digital Silk Road: China’s Quest to Wire the World and Win the Future, told Rest of World. “The digital projects are a little bit more affordable.”
Agbebi added that digital projects can often seem more politically neutral. “These digital projects can often pay for themselves, unlike roads and bridges, where there’s often a debate over how much they cost,” he said.
Analysts say playing an essential role in Africa’s digital transformation gives China a stronger footing in global affairs and creates new economic opportunities for Chinese firms. “For China, there is a bigger political agenda at play, where they’re keen to use further expansion in Africa as part of their drive to set next-generation technology standards,” said Olander.
In a white paper published by the Chinese state council two days before FOCAC, titled China and Africa in the New Era: A Partnership of Equals, the Chinese government as usual emphasized its “friendship” and “win-win” cooperation with Africa. But it also laid out its tech track record in Africa with an unusual clarity, according to Hannah Wanjie Ryder, a long-time China-Africa watcher and the CEO of Development Reimagined.
Among data points, the paper notes include building “more than half of the continent’s wireless sites and high-speed mobile broadband networks; laying “more than 200,000 km of optical fiber;” and “giving broadband Internet access to 6 million households.” It also noted that 29 African countries have picked smart government service solutions from Chinese companies.
Despite the long list, many of these projects haven’t been coordinated by the Chinese government under a grand DSR vision, but that doesn’t mean it is not able to do so after the fact, said Ovigwe Eguegu, a policy analyst at Development Reimagined. Many projects were led by Chinese companies and entrepreneurs, and the government got involved later, with loan support from the Export-Import Bank, for example. “Private Chinese companies, like Transsion and OPay, have shown what can be achieved in Africa,” said Eguegu. Shenzhen-based Transsion sold nearly half of all smartphones in Africa last year, while three-year-old Nigeria-based fintech startup OPay, owned by Chinese billionaire Zhou Yahui, has racked up millions of users and is already valued at more than $2 billion.
The continent is still woefully underserved when it comes to the digital transformation of local economies — that means there are still huge opportunities for well-funded businesses. Africa has less than 1% of total available global data center capacity, according to Xalam Analytics, and about 17% of the world’s population.
There’s been a lot more talk about the “digital sovereignty,” that Senegalese president Sall suggested back in June. And the Chinese have been keen to support these plans, said Hillman. But digital sovereignty can also be an empty buzzword. “This feeds into the myth that storing data locally makes it more secure, even if the whole technical and support package is provided by foreign firms.” The U.S. has supported similar plans, with the U.S. International Development Finance Corporation investing $300 million in South Africa–based Liquid Telecom’s Africa Data Centres last December.
In the coming years, Chinese investment will focus on tech in African countries and other emerging markets, according to Olander. “The world is becoming a lot smaller for companies like Huawei that are being pushed out of Global North countries,” he said. “So regions like Africa, even though nowhere near as lucrative, have become much more important.”
It’ll be up to African policymakers and governments to ensure they don’t completely give Chinese companies full control of their digital ecosystems. While this caution should apply to any foreign partner, the depth of Chinese tech firms’ relationships on the continent could put China in an unusually powerful position to push their government’s geopolitical influence.
African governments should learn from China’s own experience, said Development Reimagined’s Ryder. Instead of simply allowing Chinese partners to bring in technical experts who leave after building digital platforms, these governments should ensure there is significant knowledge transfer, retention of corporate control, and sharing of IP. “We should be requiring joint ventures with Chinese tech companies, as China did with the likes of IBM and others in the 1980s,” said Ryder.