EU earmarks 177 billion U.S. dollars; for investment in Africa

Flag Of The European Union Waving In The Wind On Flagpole Against The Sky With Clouds, Banner
Flag of the European Union waving in the wind on flagpole against the sky with clouds on sunny day, banner, close-up

On Wednesday, the European Commission revealed a strategy to invest 300 billion euros (equivalent to $340 billion) worldwide by 2027 in various projects related to infrastructure, digitalization, and climate. This plan is presented as a preferable alternative to China’s Belt and Road Initiative. Named “Global Gateway,” this initiative aims to enhance Europe’s logistical networks, promote European trade, and contribute to the battle against climate change. It will primarily focus on areas such as digitalization, healthcare, climate and energy, transportation, as well as education and research.

China launched its Belt and Road project in 2013 to boost trade links with the rest of the world and has been spending heavily on the development of infrastructure in dozens of countries around the world.

But EU officials say financing offered by Beijing is often unfavourable, not transparent, and makes some poorer countries, especially in Africa, dependent on China through debt.

Unlike China, the EU would ensure local communities benefited from the infrastructure projects under Global Gateway and would also bring with it the private sector, for which EU involvement meant the investment was less risky, European Commission head Ursula von der Leyen said.

Von der Leyen emphasized that nations require improved and distinctive options when compared to China’s initiative. She made this statement during a news conference while introducing the EU program, which she described as a “genuine alternative.”

The funding from the EU, which will be provided in the form of grants, loans, and guarantees, will originate from various sources, including EU institutions, member state governments, EU financial institutions, and national development banks. These funds will be extended “on equitable and advantageous conditions” to prevent potential debt issues for third-country governments, as stated by the Commission. At Reuters