Niger: What dangers does the coup pose to China’s Belt and Road Initiative?

The grand Chinese economic investment around the world, the Belt and Road Initiative (BRI), found in many countries across the global south, especially in Africa faces threats in the Western part of Africa. This subregion in sub-Saharan Africa is prone to both political and security instabilities. Coup d’etats have plagued this region for years, and when things seemed to have slowed down for a while, the last three years saw six consecutive coups in this region.

Niger has witnessed the most recent successful coup in this sub-region; bringing the numbers to seven, two in Burkina Faso, two in Mali and one each in Chad and Guinea. The latest has attracted many international debates due to geopolitical reasons. Niger is a signed member of the Belt and Road Initiative countries.

However, the initiative encounters notable obstacles, due to the political instability encompassing instances such as the recent coup which possesses the capacity to impede China’s BRI. The objective of this article is to examine the effects of political upheavals on the Belt and Road Initiative and the subsequent ramifications for the future.

Niger is characterized as a vulnerable landlocked nation, ranking among the most impoverished globally, with a low human development index. Also, it is often recognized as being among the most economically disadvantaged nations globally.

The establishment of diplomatic relations between the People’s Republic of China and the Republic of Niger occurred on July 20, 1974, marking a significant milestone as the first instance of formal diplomatic ties being established between the two nations. Niger’s transitional administration announced on June 19, 1992, declaring the “re-establishment of diplomatic relations” with Taiwan. That decision prompted the Chinese government to declare the suspension of its diplomatic relations with Niger on July 30, 1992.

However, four years later, diplomatic relations between the People’s Republic of China and the Republic of Niger on August 19, 1996, was re-established marking the commencement of a phase characterized by substantial advancements and progress in the bilateral association between the two countries.

On May 28, 2018, a Memorandum of Understanding (MoU) was established between the People’s Republic of China and the Republic of Niger. The purpose of this MoU was to facilitate collaborative efforts in constructing the Silk Road Economic Belt and the 21st Century Maritime Silk Road. Before the signing of the MoU, China had already begun infrastructural projects in Niger since the re-establishment of the diplomatic ties. The signing of the MoU was to deepen the already existing relations. Following the signing of the MoU, President Mahamadou Issoufou paid a diplomatic visit to China the following year.

A coup, international suspense and the geopolitics

On July 26, 2023, the Republic of Niger’s Presidential Guard detained President Mohamed Bazoum. General Abdourahamane Tchiani, who was in charge of the Presidential Guard, declared himself head of a new military government. Niger has experienced four instances of military coups following its attainment of independence from France in 1960, the most recent before July’s own was in 2010.

In the given historical context, this concludes that this current coup is the first Coup in the country after the signing of the Belt and Road Initiative agreement. However, there were multiple instances of coup attempts in the ensuing period between 2010 and 2023, with the most recent occurrence transpiring in 2021, just two days before the scheduled inauguration of President-elect Mohamed Bazoum. He became the inaugural individual in the nation’s history to assume the presidency after the democratic election of a preceding president.

Effects of Niger’s Coups on BRI

The presence of political instability, including events like a coup d’état, presents a substantial risk to foreign investment, particularly in the case of a project as extensive and ambitious as the BRI. Coup d’états, characterised by abrupt, forceful, and illicit alterations in governmental power, can lead to a range of adverse consequences for investments made by foreign entities.

Disruption of Projects: Coups almost always result in the suspension, either temporarily or permanently, of work that is currently underway. For instance, the China Gezhouaba Group Co Ltd announced the suspension of the construction of the 130MW Kandadji Hydroelectric Dam in Niger. The proposed industrial park project in Niamey is also in limbo following the coup. Jiang Feng, the Chinese Ambassador to Niger met the democratically elected president Bazoum and revealed the plans for the park, just a few days before the coup.

Financial Losses: It is conceivable that a coup may lead to financial losses. China faces the potential of witnessing the depreciation of its assets if a new administration fails to honour pre-established contractual obligations or if projects are rendered non-viable due to armed conflict. Additionally, it is plausible that the loans may enter a state of default if the newly established government demonstrates an unwillingness or incapacity to fulfil the necessary repayment obligations.

Negative Impact on Reputation: Coups have the potential to hurt the reputation of other countries in ties with them. A military takeover leads to the installation of a government that is shunned by the international community. The Economic Community of West African States (ECOWAS) which is the international regional bloc that Niger belongs has suspended the country from regional activities and also slapped sanctions on the military government. Many countries in the West have criticized the coup and have suspended all kinds of loans and aid to the now-military government. China may come under scrutiny for doing commercial dealings with the new government as the international community puts pressure on the coup leaders to restore democracy. This may harm China’s reputation in the international community, thus suggesting China’s promotion of non-democratic governments.

Future Implications

The ramifications of coups in Africa on the BRI encompass several consequences for forthcoming developments.

Increased Risk Awareness: An increased knowledge and caution regarding the dangers associated with investing in politically turbulent states. The Chinese government and Chinese businesses are essentially privy to the dangers associated with investing in politically turbulent states. Because of this, the execution of more complete risk appraisals and possibly a slowing down of the rate of investment in some areas may be the result.

Enhanced investment diversification: China might opt to expand the extent of its investment diversification as a measure to mitigate risks. One potential strategy to mitigate the risk of concentration in a particular country or region is to diversify investment by allocating resources to a larger number of smaller projects or countries characterised by greater levels of political and economic stability. This will inadvertently leave many of the countries that severely need China’s cash out of the benefiting lot.

Placement of a higher priority on diplomacy: It is expected that China will place a higher priority on diplomacy to prevent or resolve problems that could affect the BRI. This might mean increasing the number of diplomatic interactions with African leaders and even playing a more active role in the conflict resolution process across the continent.

More Sustainable Development Models: One of the things that China might have to think about concerning BRI projects is the possibility of more inclusive and environmentally friendly forms of economic growth. The implementation of such inclusive models places a greater emphasis on local collaborations, the development of skills, and initiatives that are manifestly beneficial to the areas in which they are implemented. It is possible that doing so will assist in generating more local support for BRI projects and lessen the risk of disruption due to political instability.

The Belt and Road Initiative encapsulates a visionary dream of fostering worldwide economic development. However, it is important to acknowledge the significant challenges posed by the political instability resulting from coups across the African continent. For the BRI to achieve its maximum efficacy, it is imperative for the Chinese government and the involved enterprises to adeptly navigate the forthcoming challenges. The implementation of a guarded, diverse, diplomatic, and long-term plan may potentially contribute to the attainment of the project’s success.