Assessing the Risks of Chinese Investments in Sub-Saharan African

By Judd Devermont, Amelia Cheatham, & Catherine Chiang | June 2019

Chinese investments in sub-Saharan African ports1 present potential threats to U.S. influence in sub-Saharan as well as African sovereignty. A recent CSIS report,Influence and Infrastructure: The Strategic Stakes of Foreign Projects, identifies some of the strategic risks posed by the three stages of Chinese infrastructure projects, enabling Beijing to potentially restrict access to its rivals, exploit ports during conflict, and collect intelligence. Drawing on English-language press releases and open-source reports, the CSIS Africa Program identified 46 sub-Saharan African ports with financial, construction, or operational involvement by Chinese entities.

Some caveats are needed. The data presented in maps and charts here does not represent an exhaustive list of Chinese involvement in African ports nor does it capture the value of funding shares or the precise stage of completion due to limited information.2 Despite its shortcomings, this approach applies a methodology to distinguish which ports are more vulnerable to Chinese strategic intervention and provides practitioners and scholars a foundational framework from which to build future research. While it does not purport to reveal the next military base or Hambantota in Africa, the data indicates where Beijing is making a bigger bet on a port’s potential and reveals which ports are more susceptible to Chinese influence and control.

Why Ports? Sub-Saharan African ports play an integral role in Beijing’s Belt and Road Initiative (BRI), the sprawling network of Chinese infrastructure projects linking China with Europe, East Africa, and Southeast Asia. With the launch of BRI in 2013, President Xi sought to open China to

1. The CSIS Africa Program reviewed all projects relating to overall port investment including, for example, investments in , terminals, berths, quays, piers, etc. The data covers a wide range of port projects (e.g., container ports, oil ports, multipurpose ports, and roll-on roll-off vessel ports, which vary widely in size, operation, and structure). 2. Information on Sino-African port contracts is limited to statements made by both parties. Notably, Chinese compa- nies are accused of embellishing the number and progress of their investments which could lead to inflated counts.

1 new markets, expand his country’s political influence globally, and secure military access and mobility across regions. Forming the backbone of China’s “Maritime Silk Road,” investments in African ports provide a gateway to the region’s trade and economic development, empower China with political leverage and clout on the continent, and provide a foothold for People’s Liberation Army Navy (PLAN) activities.

The 46 ports identified in this data align with broader Chinese military, commercial, and political objectives. One of the key challenges is decoupling these three objectives, distinguishing which ports have security dimensions from those that offer purely commercial gains.

There are signs that Beijing plans to use these port investments to increase its military and political reach. The various Chinese entities driving African port development have deep ties to Beijing.3 At least six of the ports captured within this data were also visited by Chinese naval vessels or are dual-use civilian-military ports.4 Seven of the eleven ports operated by Chinese entities are deep-water, opening the possibility for larger commercial, but also military, vessels to dock.5

Not all Chinese port investments, however, pose a direct security risk to U.S. or African interests. Most are likely pursued for commercial gain. China has risen in the last decade as the continent’s main trade partner, and port investments are just one of the main avenues through which it is establishing commercial supremacy in the region. Not only do many Chinese-backed ports found within our data hook into other BRI projects, but Chinese companies have directed resources towards ports with the most commercial potential.6

Moreover, port expansion and rehabilitation projects are key to furthering African growth and development. Ninety percent of African exports depend on ports. Chinese investments that aim to address congestion and outdated port infrastructure, which currently limit trade flows on the continent, are projected to contribute toward regional GDP growth.7 These port projects consequently, not only fuel African growth, but also reinforce China’s image as a development partner and boost its political influence. At a ceremony celebrating China Engineering Company’s project at Walvis Bay Harbor, , the Chinese Ambassador to Namibia, Zhang Yiming said:

3. Our research uncovered about 18 state-owned enterprises with interests in African ports. China’s central govern- ment allegedly also influences Huawei, one of two private companies identified. Major Chinese players in African ports include China Communications Construction Company Limited and China Merchants Group Limited, the latter of which makes up about 40 percent of the ports operated by China. 4. Data on dual use ports is found here: https://ig.ft.com/sites/china-ports/. Data on Chinese port visits was compiled from news reportage of the Chinese naval hospital vessel, the Peace Ark, voyage in African waters. These data sources were then cross-referenced with ports known in our data in which the Chinese invested (Dar es Salaam Port, Momba- sa Port, Djibouti Port, Port, Port of Pointe Noire, Walvis Bay). 5. Lekki Deep Sea Port; Kribi Deep Sea Port; Autonomous Port of ; Lomé Port; Port of Djibouti; Bagamoyo Port; Port of Pointe Noire. 6. PwC projects that the Ports of Durban, Abidjan, and Mombasa will lead their sub-region’s trade as commercial hub ports, with -Apapa, Tema, and Djibouti or Dar es Salaam close behind. Chinese entities have invested in all seven of these ports. 7. PwC estimates that a 25 percent boost in port performance would coincide with a 2 percent rise in regional GDP.

ASSESSING THE RISKS OF CHINESE INVESTMENTS IN SUB-SAHARAN AFRICAN PORTS | 2 [T]his is the benchmark project for China-Namibia friendly and pragmatic cooperation, which symbolizes the great attention of our leaders to our relations and the brotherhood between our people. Mapping Chinese Port Investments There are at least 46 existing or planned port projects in sub-Saharan Africa, which are funded, built, and or operated by Chinese entities. Chinese investment was present in roughly 17 percent of the 172 sub-Saharan African ports captured in the 2017 World Port Index.8 These ports are positioned along each coast, providing Chinese access to main maritime routes and chokepoints.

NOUADHIBOU LOMÉ SHAIKH IBRAHIM LIVESTOCK PEIR TIN CAN ISLAND (LAGOS) CHOKE POINT MINDELO MASSAWA APAPA (LAGOS) TADJOURAH KAMSAR DJIBOUTI LEKKI CALABAR

T SIERRA O DJIBOUTI CITY G LEONE IVORY O G DOUALA COAST H A N A DAMERJOG MATAKONG KRIBI LAMU ABIDJAN BATA PEPEL SAO TOME AND MOMBASA ATUABO PRINCIPLE FREETOWN

TAKORADI FERNÃO DIAS REPUBLIC OF DEMOCRATIC MPIGA DURI THE CONGO JAMESTOWN () POINTE-NOIRE BAGAMOYO DAR ES SALAAM TEMA CAIO

CABINDA MTWARA NARINDA BAY DEEP-WATER PORT LOBITO BAY E AMBODIFOTATRA U IQ CHINESE PORT B (NOSY BORAHA) M ZA O M TOAMASINA BEIRA R INVESTMENTS IN AFRICA A C NAMIBIA AS AG AD M = Operator = Ports WALVIS BAY

= Builder = Main shipping route MATUTUINE DISTRICT () = Funder = Minor shipping route RICHARDS BAY DURBAN = Multiple ports = China Maritime Silk Road

View the interactive map: https://csis-ilab.github.io/mapbox-custom/africa-ports/

Strategic Opportunities to Exploit Port Infrastructure Further research is essential to separate port projects that pose a security threat to African governments, the United States, or other international partners from those that are made with commercial intent. In the sections below, the CSIS Africa Program has enumerated the security risks tied to each phase of port investment. We identify operation/ownership as the most immediate risk to U.S. interests followed by financing and construction.

8. Sixteen of the ports found in our data were not within the World Port Index, in part because they still in a pre-con- struction or construction phase, or otherwise initiated in 2017 or after.

DEVERMONT, CHEATHAM, & CHIANG | 3 Operation. Chinese port ownership or operation pose immediate risks to U.S. interests,9 potentially allowing China to extract intelligence, block the U.S. government from accessing territory or services (such as critical port access at Djibouti City), and use ports to dock military vessels. China’s technical knowledge and operation of ports spread across the region may also provide strategic depth to preposition, deploy, and refuel its naval fleet, as well as block adversaries, during periods of conflict. Notably, port investments do not always precede Chinese military access to ports. China, for example, secured the right to dock military vessels at through a separate bilateral military agreement. Neither do operation rights ensure that an African government will allow a Chinese military vessel to dock in their waters. Theport authority’s role in operations and its lease agreements, as well as the relationship between the host government and Chinese state are factors that future research should consider.

Chinese entities operate 11 of the 46 sub-Saharan African ports identified (see below Figure 1. Ports Operated by Chinese Entities). Seven are situated on the west coast and four on the east coast. The Doraleh Multipurpose Port in Djibouti City is currently the most concerning port given its proximity to a maritime chokepoint and U.S. military base. If counting its naval base, China currently controls two of the five terminals at the Port of Djibouti. Additional research could reveal the strategic significance of the other 10 ports.

Financing. Through funding, China can solicit projects that further its policy objectives, feed corruption, and influence local politics. In addition, funding allows China to favor Chinese construction companies, negotiate operational control and access to resources, and potentially seek further concessions if African countries renege on debt payments. Chinese entities financed 27 of the 46 sub-Saharan African ports identified.10 Chinese entities operate 75 percent of Chinese financed ports, and Chinese entities also constructed 90 percent of these ports (see below Figure 1. Ports Operated by Chinese Entities and Figure 2. Ports Financed or Constructed by Chinese Entities).

Construction. Construction enables China to collect intelligence on port infrastructure, establish a dependency on Chinese technology and expertise, and ensure long- term interoperability with Chinese materials and technology. Chinese entities have overseen construction projects at 41 of the 46 sub-Saharan African ports identified (see below Figure 1. Ports Operated by Chinese Entities and Figure 2. Ports Financed or Constructed by Chinese Entities).

9. Operation is defined here as ports in which Chinese entities are contractually granted the right to operate facilities or ports in which Chinese entities own more than a 50 percent equity share. 10. Financing is defined here as Chinese-backed loans or the purchase of minority equity shares. Notably, information on minority versus majority equity holdings is limited.

ASSESSING THE RISKS OF CHINESE INVESTMENTS IN SUB-SAHARAN AFRICAN PORTS | 4 Figure 1. Ports Operated by Chinese Entities*

PORT PROJECT(S) APPROX. LOCATION OPERATOR FUNDER BUILDER STATUS

West Africa

Lekki Deep Sea Port Lagos, Nigeria X X X In Progress

Tonkolili Iron Ore Project, Pepel, Various Stages Pepel Port & Tagrin Point Port X X X

Kribi Container Terminal, Mboro Village (Kribi), Various Stages Kribi Deep Sea Port Cameroon X X X

Various Projects, Abidjan, Cote d’Ivoire Various Stages Autonomous Port of Abidjan X X X

Tin-Can Island Port Tin Can Island (Lagos), Container Terminal Limited, Nigeria X Completed Tin Can Island Port

Lomé Container Terminal, Lomé, Completed Lomé Port X

East Africa

Doraleh Multipurpose Port, Djibouti City, Djibouti Completed Port of Djibouti X X X

Stalled Bagamoyo Port Bagamoyo, Tanzania X X X Indefinitely

Maruhubi Multipurpose Port Mpiga-Duri, Tanzania X X X Announced

Shaikh Ibrahim Livestock Pier, Port Sudan, Sudan Completed Port of Sudan X X

Central Africa

Pointe Noire Mineral (Ore) Port Pointe-Noire, Announced Project, Port of Pointe Noire Republic of the Congo X X X

* See footnote 9 for the definition of “operation” applied throughout this review.

DEVERMONT, CHEATHAM, & CHIANG | 5 Figure 2a. Ports Financed or Constructed by Chinese Entities

PORT PROJECT(S) APPROX. LOCATION OPERATOR FUNDER BUILDER STATUS

West Africa

Conakry Container Wharf Expansion Project, Conakry, Guinea X X Various Stages Port of Conakry

Various Expansion Projects, Nouakchott, Mauritania Various Stages Friendship Port of Nouakchott X X

Tema LNG Terminal, Tema, In Progress Tema Port X X

Takoradi Port Takoradi, Ghana X X In Progress

Bakassi Deep Sea Port Calabar, Nigeria X X In Progress

Multipurpose Terminal Project, Apapa (Lagos), Nigeria Announced Apapa Port X X

Mindelo Deepwater Port Mindelo, Cabo Verde X X Announced

Kamsar Fishing Port Kamsar, Guinea Announced Economic Zone X

Mineral Port of Nouadhibou, Mauritania X Completed

Stalled Atuabo Free Port Atuabo, Ghana X Indefinitely

Queen Elizabeth II Quay Expansion Project, Freetown, Sierra Leone X In Progress Freetown Port

Douala Chanel Expansion Douala, Cameroon Various Stages Project, Douala Port X

Jamestown Fishing Jamestown (Accra), Ghana In Progress Port Complex X

Simandou Iron Ore Project, Stalled Matakong, Guinea Makatong Deep Water Port X Indefinitely

ASSESSING THE RISKS OF CHINESE INVESTMENTS IN SUB-SAHARAN AFRICAN PORTS | 6 Figure 2b. Ports Financed or Constructed by Chinese Entities

PORT PROJECT(S) APPROX. LOCATION OPERATOR FUNDER BUILDER STATUS

East Africa

Tadjourah Port Tadjourah, Djibouti X X Completed

Djibouti Damerjog Industries Damerjog, Djibouti In Progress Development X X

Various Expansion Projects, Dar es Salaam, Tanzania Announced Dar es Salaam Port X X

Expansion Project, Mtwara , Tanzania In Progress Mtwara Port X

Various Expansion Projects, Massawa, Eritrea Completed Massawa New Port X

Lamu Port Lamu, Kenya X In Progress

Construction of Three Berths, Mombasa, Kenya Various Stages Mombasa Port X

Central Africa

Expansion and Rehabilitation Bata, Equatorial Guinea Completed Project, Port of Bata X X

Fernão Dias, São Tomé e Deep Sea Trans-Shipment Port Announced Príncipe X X

Various Expansion Projects, Stalled Libreville, Gabon Port Mole X Indefinitely

DEVERMONT, CHEATHAM, & CHIANG | 7 Figure 2c. Ports Financed or Constructed by Chinese Entities

PORT PROJECT(S) APPROX. LOCATION OPERATOR FUNDER BUILDER STATUS

Southern Africa

Various Expansion Projects, Lobito, Angola Completed Port of Lobito X X

Stalled Caio Deep Water Port Caio, Angola X X Indefinitely

Rehabilitation and Expansion Beira, Completed Project, Beira Fishing Port X X

Various Rehabilitation Durban, South Africa Various Stages Projects, Port of Durban X X

Various Renovation Projects, Ambodifotatra In Progress Port of Ambodifotatra (Nosy Boraha), X

Tamatave Deepwater Harbour Toamasina, Madagascar X Announced

Narinda Bay Deep-Water Port Bay of Narinda, Madagascar X Announced

Various Expansion Projects, Walvis Bay, Namibia In Progress Port of Walvis Bay X

Port of Cabinda Cabinda, Angola X Various Stages

Shipbuilding and Repair Richards Bay, South Africa Announced Facility, Richards Bay Port X

Deep Water Port of Matutuíne District (Maputo), Announced Techobanine Mozambique X

Judd Devermont is the director of the Africa Program at the Center for Strategic and International Studies in Washington D.C. Catherine Chiang is a program coordinator and research assistant with the CSIS Africa Program. Amelia Cheatham was a former intern with the CSIS Africa Program.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2019 by the Center for Strategic and International Studies. All rights reserved.

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