analysis: Sassou Draws in Beijing
allafrica.comThe Chinese-led construction boom in Congo-Brazzaville has been assuming mythical proportions. In May, rumours - boosted by a mobile phone video - swept through Brazzaville and Kinshasa that a Chinese exorcist had captured a river demon that had been destroying the pillars of a Chinese-built bridge.
For President Denis Sassou-Nguesso, the benefits of the boom could prove more tangible: a practical response to his critics who accuse him of presiding over decades of political repression, grand corruption and a stagnant economy.
Congolese critics accuse Sassou-Nguesso of using the Chinese-backed building boom to move from his 'authoritarian-authoritarian' model to something nearer the 'developmental authoritarian' style of Rwanda's President Paul Kagame. However, Sassou-Nguesso was in triumphant mode as he inaugurated a spate of Chinese construction projects in the country's hinterland on 14-18 May. These projects are intended to bring the benefits of oil-backed growth to regions previously isolated from the bustling cities of Brazzaville and Pointe-Noire.
Now known locally as 'The Cutter of Ribbons', Sassou-Nguesso is using oil money and plans to develop Congo-Brazzaville's mineral resources to shape a new relationship with China. Once a key commercial and diplomatic ally of France, Sassou-Nguesso's headlong rush to Beijing coincides with the election of President François Hollande. Hollande's African policy team promises to break with the old Françafrique networks. Among their advisors is the activist lawyer William Bourdon, who has been pursuing a case against Sassou-Nguesso in France for stealing Congolese state assets.
In January, Jean Jacques Bouya, the Minister of the Délégation Générale des Grands Travaux (Office of Public Works, DGGT), announced 16 signposts of progress for the year 2012. Almost every one is being developed by a Chinese company (see Map). From fibre-optic installation and new dams to more than 1,000 kilometres of paved roads, companies like China Road and Bridge Corporation and China State Construction Engineering Corporation have quietly landed most of the major contracts issued by the Brazzaville government.
AfDB pushes for more oversight
Many of those contracts have been awarded without public tender, but the same companies have picked up contracts financed by China and international financial institutions such as the African Development Bank (AfDB). That means large profits and more deals to come. China and Congo-Brazzaville signed a framework deal in 2006 that called for US$1 billion in finance from China Export-Import Bank and China Development Bank for projects like the national fibre-optic backbone. Concerned by Brazzaville's oversight of such contracts and worried about their quality, the AfDB pushed the Brazzaville government to set up a special 'execution' department in the DGGT as part of its agreement to finance the Ketta-Biessi road.
Congo-Brazzaville, for so long the preserve of European companies, is drawing serious attention from China. The two countries have signed deals to develop special economic zones, build a new oil port and revamp an ageing refinery. For the Chinese investors, the lure is Congo-Brazzaville's rich but under-exploited resource base. Having relied for decades on offshore oil riches and forestry, the country has until recently made little effort to exploit its mineral deposits, develop its more remote regions or diversify the economy into commerce and services. That could change if the new Asian relationships live up to their billing. For Sassou-Nguesso, the big attraction is an engagement based purely on economic and financial criteria, with a partner who does not impose awkward governance or human rights conditions.
This is not Congo's first encounter with Asian investment. South Korean and Malaysian companies, via the Consortium Congo Malaisie Corée, had proposed a huge resources-for-infrastructure deal that would build new rail lines in exchange for access to forestry and mining permits in 2008. That deal didn't work out but the Chemin de Fer Congo Océan received part of its order of engines and cars from Korail in August 2011. Malaysian investors have looked at opportunities in the hydrocarbons sector and - building on their experience of rural Congo in the timber business - palm oil production. In 2010 Atama Plantation agreed to invest $300 million in new oil palm plantations and processing capacity.
The most recent interest from Chinese entities takes the engagement a step further. Alain Akouala Atipault, a Minister in the Presidency, was China's guest at an international infrastructure and investment forum in Macau where, on 24 April, he signed an agreement with the China Friendship Development International Engineering Design and Consult Corporation (FDDC) - an offshoot of the Trade Ministry in Beijing.
FDDC will seek out Chinese investors interested in setting up operations in four special economic zones, which Congo plans to establish in Brazzaville, Pointe- Noire, Ouesso and the Oyo-Ollombo area. FDDC will also help to mobilise financing for the zones, build their infrastructure and carry out feasibility studies.
Ouesso and Oyo-Ollombo
The agreement with FDDC on development of the SEZs is less concrete than the upcoming oil sector projects, but it may be more political. While Brazzaville and Pointe-Noire, the country's main cities, are good locations for industrial or trading estates, the nomination of Ouesso poses a greater challenge. The town, in the far north close to the Cameroon border and surrounded by deep rainforest, was until recently a remote backwater. It could become more significant if northern mineral projects develop or if the cross-border trade with Cameroon increases.
Above all, the government's selection of Oyo and Ollombo reflects the fact that Oyo is the home base of Sassou-Nguesso's family and of many of his closest political allies. Already, an international-capacity airport has been built at nearby Ollombo and the regime is determined to develop this area. In November 2011, Chinese communications company ZTE announced it would build a solar-panel plant at Oyo, some 500 kilometres from Brazzaville.
After visits to Singapore - in August 2011 - and Mauritius, Sassou-Nguesso began to talk of Congo pursuing the development of the SEZs (AAC Vol 5 No 2). Some Congolese sources ambitiously suggest that Oyo-Ollombo, which is touted as an agricultural centre, would follow their example over the next two decades. In February, Djoko Prihanto, Vice-President of the Singaporean group Surbana, led a ten-day exploration mission to the President's home area. Surbana is due to submit a feasibility study to the government at the end of this year. In 2010, it said it had won a contract to develop a master plan for a 107,000 square kilometre zone in Oyo-Ollombo, while Singapore's Vector Scorecard Asia- Pacific is doing the economic analysis.
Akouala Atipault's trip to Macau came just weeks after China's Shandong Landbridge Group signed an agreement to modernise the Congolaise de Raffinage (Coraf) plant in Pointe-Noire and also to construct a new marine oil terminal for the city. These two projects are rooted in the proven economics of a sector where Congo is well established and accustomed to working with foreign investors. Congo-Brazzaville is already a substantial oil exporter, but the new terminal could help to attract smaller hydrocarbon investors, glad to be spared the cost of building their own export facilities. These are precisely the sort of junior players that Brazzaville wants in order to make the most of its marginal fields and explore for more secondary deposits. China Congo Wing Wah Petrochemical and China National Offshore Oil Corporation are already active in onshore and offshore zones.
Meanwhile, Coraf - originally a business unit of the state oil sector holding company Hydrocongo, set up back in the socialist era - is run down and in need of serious modernisation. The dilapidated state of the plant has been an obstacle to government hopes that it could be privatised. It does not always make commercial sense to operate a local refinery to serve a small national market.
Shandong Landbridge has promised to equip Congo-B with a modern installation that would operate on a commercial basis and might even be able to develop export business, serving regional markets such as parts of Congo-Kinshasa. The refinery and port projects are the core businesses of Shandong Landbridge - a private group based in northeast China, involved in the timber trade, property, port operations, logistics and petrochemicals.
Shandong Landbridge would join a litany of Chinese companies developing projects in Congo-Brazzaville. Beijing Construction Engineering Group is building the Cour Constitutionnelle building, hospitals at Mpissa and Oyo, the new headquarters for the public TV and radio stations, the Ministry of Foreign Affairs building and low-cost housing in Brazzaville, in addition to revamping the head office of the Société Nationale des Pétroles du Congo. China Jiangsu International Group is building a new airport at Ollombo. Weihai International Economic Technical Cooperative is working on a new airport in Brazzaville and low-cost housing. Zhengwei Technique Congo is constructing a low-cost housing project in Brazzaville and renovating stadiums in Owando and Pointe-Noire.
Beijing takes the long view
China's engagement in Congo is typical of its strategy elsewhere in Africa. Beijing often takes a long-term view of whether projects will generate an economic return. Viability is seen in broad terms, encompassing not just the specific project's concerns but also the wider trade and political benefits of partnership and the political goodwill that could open up access to valuable natural resources. Congo has both major reserves of high-value timber - a sector where Congo Dejia Wood Industry, Jua Ikié, Million Well Congo Bois, Sino-Congo Forêt and Société d'Exploitation Forestière Yuan Dong are already active - and reserves of minerals such as iron ore and potash, which are largely untouched.
China National Complete Plant Import & Export Corporation is developing the potash reserves at Mengo with Canada's MagIndustries; Australia's Sundance Resources relies on finance and expertise from Hanlong Mining and other Chinese infrastructure companies to make its designs on iron-ore projects in Cameroon (Mbarga) and Congo-Brazzaville (Nabeba) viable. Sundance is waiting for final approvals from Yaoundé and Brazzaville and expects all the paperwork to be signed before the end of 2012.
Beijing's policy of ignoring questions of democracy and human rights is certainly helpful to Sassou-Nguesso's regime - which has a poor human rights record, is marred by widespread corruption and remains fundamentally authoritarian despite the trappings of a multiparty system. These factors have hindered the regime's efforts to rebuild strong relationships with Europe and the United States over recent years but don't figure in relations with China.