China from the beginning of the 21st century until now has succeeded and climbed to the second place in the world economy after the USA. Thus, it now claims global diplomatic and economic influence, competing with the other major powers in trade and investments, especially in Africa.

Africa on the other hand is a vast geographical area of ​​the planet, it is the world’s third largest continent in terms of area and second in population (estimated approximately for 2024 at 1.5 billion inhabitants). It has an area of ​​about 30.2 million square kilometers together with the surrounding islands and occupies 6% of the total surface of the Earth and 20.4 percent of the total land area.

It is also rich in natural resources (oil, natural gas, uranium, lithium, cobalt, diamonds, gold, copper, etc.) and is therefore of great economic interest. The Democratic Republic of Congo, for example, accounts for about 70% of the world’s cobalt production.

China’s relations with African states are, of course, not new. They date from the 1950s, and specifically in 1955, when the Bandung Conference took place, in which the 29 participating African and Asian countries adopted the “Five Principles for Peaceful Coexistence”, which China had initially agreed with of India in 1954. These are: mutual respect for sovereignty and territorial integrity, mutual non-aggression, mutual non-interference in each other’s internal affairs, equality and mutual benefit and peaceful co-existence.

At that time, China signed state trade agreements with African states, such as Algeria or Sudan. Also at the end of 1963, the then Premier of China, Chu Enlai, number two after Mao Zedong, made a trip to ten African states in two months. Since then, China’s presence in Africa has been increasingly intense.

China’s interests in the African continent are centered on economy, politics, security and culture. Africa is important to China primarily as a huge source of resources to sustain its growing manufacturing base, as well as a source of energy security. At the same time, China sees Africa as an important destination for its low-cost manufactured goods.

Africa also plays an important role in international multilateral organizations and especially in organizations where each member- country has one vote. Thus, China is trying to woo African governments in order, to garner support for its policies on the international stage.

Since 2002, in fact, the Forum on China–Africa Cooperation (FOCAC) has been fully operational, whose members are 53 African countries (i.e. all fully recognized except the Kingdom of Eswatini which has diplomatic relations with Taiwan), and which operates at three levels with higher the ministerial level. It is also held every three years, alternating between an African country and China. The most recent FOCAC Conference was held in Beijing from 4-6 September 2024.

At this 9th Conference, Chinese President Xi Jinping pledged to provide Africa with 360 billion yuan ($50.7 billion) in financial support over the next three years, while promising that his government would help create at least 1 million jobs on the continent.

FOCAC which established in 2000, is the main multilateral coordination mechanism between African countries and China and is based with the declarations on the principles of peaceful coexistence. FOCAC is the main channel through which China provides resources to African countries. Through FOCAC, China provides aids in the forms of debt cancellation-in 2003 it deleted US$750 million to a total of 31 African countries—grant aid, soft loans and interest-free loans.

Beijing, therefore, is the first creditor and one of the main financers of many infrastructure projects. Chinese funding has gone into building highways, railways – recently the Addis Ababa-Djibouti and Mombasa-Nairobi railway networks in Kenya were handed over to local governments-ports and electricity production power stations across the continent (e.g. in Nigeria, Ghana and Gabon).

More than 3,000 Chinese companies, after all, are present in African cities, of which over 70% are private companies, forming the mainstay of Chinese investment in Africa.

From 2017 to 2022, China’s foreign direct investment (FDI) in Africa reached 74 billion yuan ($10.14 billion), accounting for 18% of global foreign direct investment in Africa and on par with Europe and the USA.

Beijing is the leading trading partner of the African continent. According to the International Monetary Fund (IMF), almost a quarter of African exports go to China, mainly minerals and metals, and about 16% of imports come from it. China’s trade with African countries peaked in 2023 at $282 billion.

At the same time, as reported by the Global Times, tourists from China visited various African destinations in 2024, including Kenya, Tanzania and Morocco. In fact, according to this publication, Kenya announced $1.1 billion in revenue from similar tourism activities in the first half of 2024 alone.

China is, moreover, in fierce and open competition with the West, primarily the United States, in Africa, with the two superpowers trying to increase their political influence on the continent and their access to its natural resources.

China’s penetration campaign in Africa takes on added weight for the Chinese regime as it claims leadership in the so-called “Global South,” which has gained such momentum that it implicitly indicates the rearrangement of global power between an old and a rising world.

In closing, I would like to emphasize that the declared principle of non-interference in the internal affairs of other states must not be circumvented by China under any circumstances. The future of Africa which has been brutally tortured by European colonialism-most exploited in terms of its natural resources and its population-must be determined by Africans, not dictated by any foreign powers that may seek to exploit their resources and their problematic points for their own benefit.

Isidoros Karderinis is a journalist, foreign press correspondent accredited to the Greek Ministry of Foreign Affairs, as well as an economist, novelist and poet. His articles have been published in newspapers, magazines and websites in many countries of the world. Facebook: Karderinis Isidoros

The National Bank Governor of Ethiopia, armed with IMF-backed recommendations, has declared that the government should refrain from borrowing from its own central bank. This pronouncement, poised to charm the parliament into submission, comes with the shiny allure of “modern economic discipline.” But let’s pause for a moment. Does this shiny allure hold water, or is it just another over-hyped economic myth?

I’ve said it before, and I’ll say it again: the move to make the National Bank of Ethiopia (NBE) “independent” is a poor decision for Ethiopia. Sure, it might look like a responsible, grown-up move in the UK (even there, opinions differ), but imposing this model here is akin to asking grand son to wear a suit tailored for me – completely ill-fitting and absurd!

Let’s get one thing straight: the Ethiopian government is not your average household. Comparing the two is like equating a lion’s roar to a kitten’s meow – fundamentally different in scale and impact. A household relies on income to spend; a government creates its currency. The Ethiopian Birr doesn’t magically appear from the IMF’s vaults or the World Bank’s benevolence. No, it springs to life through the National Bank of Ethiopia, which exists precisely to serve the government’s monetary needs.

This raises the most critical question: why should a sovereign government, which has the unique authority to create its currency, limit itself by borrowing from private entities or lenders at interest?

Is that a trade you, dear reader, would make?

Borrowing in its own currency is not a sign of fiscal irresponsibility – it’s a foundational principle of monetary sovereignty.

Recently, we’re constantly bombarded with doomsday scenarios about national debt. But let’s unpack the numbers. When the Ethiopian government borrows in Birr, what is it really doing? It’s issuing IOUs, yes, but those IOUs sit as deposits in the NBE – a bank that it controls. These so-called “debts” are not liabilities in the same sense as household debt; they’re closer to deposits held at a safe institution.

Think about it: commercial banks stash their money at the NBE for safekeeping, much like you keep your savings at your local bank. The NBE, in turn, allows the government to “borrow” these funds to finance public spending. With this perspective, the national debt is not a forerunner of doom – it’s a savings account where commercial banks park their money and earn modest interest.

Let me ask the government this: has it ever truly struggled to repay the money it has already borrowed? I imagine the answer would go something like: “Struggled? Oh, please. We print the money, remember?

Let me touch upon inflation; ah, inflation – the trusty villain hurried out to frighten anyone questioning the orthodoxy of central bank independence. Yes, excessive money creation can lead to inflation, but Ethiopia is not in a hyperinflationary spiral. The government’s ability to create money is not limitless, but it is grounded in a practical framework: the national budget approved by parliament.

When the government spends, it injects money into the economy, creating demand and spurring growth. Taxes, in turn, are the mechanism to manage inflation by reclaiming excess money from circulation – not to fund government spending, as many mistakenly believe. Imagine if the government taxed every Birr in circulation; the economy would come to a screeching halt.

Taxes, then, are not about funding but about balancing. They prevent the economy from overheating while leaving enough money in circulation to keep the wheels of commerce turning.

Pushing the government to rely on the market for borrowing means shackling public policy to the whims of private financiers. What happens if the market says no? What if interest rates soar? Does the government shut down hospitals, abandon schools, and halt infrastructure projects? This is not fiscal discipline – it’s fiscal absurdity.

By outsourcing its monetary power to private markets, the government essentially becomes a beggar in its own house. A sovereign nation should never find itself at the mercy of the market when it comes to spending in its own currency.

The obsession with central bank independence and constraining government borrowing is a neoliberal relic that Ethiopia cannot afford to import wholesale. Our economic challenges demand bold, pragmatic solutions, not the application of one-size-fits-all models from distant economies with vastly different realities.

So let’s stop the nonsense. The Ethiopian government has the tools it needs to fund its priorities. It doesn’t need to play by the IMF’s rulebook to prove its economic maturity. Sovereign money is a powerful tool – one that, when used responsibly, can build the infrastructure, education, and healthcare systems Ethiopia desperately needs.

Yes, Mr. Prime Minister, why gamble with Ethiopia’s economic future?

The International Monetary Fund (IMF) recently gave Ethiopia a pat on the back, praising its economic reforms and tighter monetary policies. But let’s take a closer look—this isn’t the shiny success story it’s made out to be. In fact, it feels a bit like cheering for a marathon runner who’s barely made it past the first mile and is limping already.

First, the exchange rate gap. Yes, the IMF applauds Ethiopia for narrowing the gap between the official and black-market rates, but let’s not pop the champagne just yet. What’s really happened? The official rate is sliding toward the black-market rate, yet a gap of 12-15% remains. It’s like patching a leaky boat with duct tape—it’s still taking on water. Can this really be considered “fixing” the economy? Businesses struggling to access foreign currency would certainly disagree.

Then there’s the talk about “better management of the economy and improving the business environment.” Seriously? Tell that to the entrepreneurs grappling with inflation, dwindling purchasing power, and red tape that could stretch to the moon. Statements like this might look good on IMF stationery, but they’re not fooling the people living with the consequences.

A particularly troubling aspect of the IMF’s assessment is its praise for Ethiopia’s tight monetary policies. While controlling inflation and reducing central bank borrowing are important, these measures risk pushing the country into austerity at a time when growth is desperately needed. Ethiopia’s economy requires robust public investment, especially in infrastructure and agriculture, to create jobs and reduce poverty. Tight money policies could stifle this growth, further exacerbating economic challenges.

Most glaringly, the IMF fails to address Ethiopia’s ongoing security crises in the Amhara and Oromia regions. These regions are among the most agriculturally productive in the country, yet they are mired in escalating violence and instability. The conflict not only disrupts livelihoods but also undermines the very foundation of economic growth and food security. It is puzzling, if not outright negligent, that the IMF overlooks these significant factors in its analysis.

So, what’s wrong with the IMF? Its approach appears overly focused on technical economic indicators, sidelining the broader socio-political context that directly impacts economic performance. By ignoring the severe security issues and the lived realities of businesses and citizens, the IMF risks promoting policies that may look good on paper but fail to address Ethiopia’s core challenges. A more nuanced, inclusive, and grounded approach is urgently needed to truly support Ethiopia’s recovery and growth.