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More Industry InsightsGerman report describes how Chinese telecom companies are moving into the heart of African governance

January 18, 2023by myles0

Megatrends Afrika believes that the strong presence of telecommunications companies from the Middle Kingdom in Africa contributes to improving connectivity and reducing the digital divide on the continent, but generates new challenges .   

While bringing economic opportunity, the growing engagement of Chinese telecommunications companies in Africa poses risks related to digital sovereignty, cybersecurity and political freedoms, according to a report published in November 2022 by Megatrends Afrika, a research platform launched by the German Institute for International and Security Affairs (SWP), the German Institute for Development and Sustainability (IDOS) and the Kiel Institute for the World Economy (IfW).

The report points out that telecommunications companies originating from the Middle Kingdom, including equipment manufacturers Huawei and ZTE, have developed strategic partnerships with the main African telecom operators such as MTN, Sonatel, Algérie Télécom and Maroc Télécom. After supplying their customers with telecommunications network equipment, these companies often offer them long-term maintenance services to ensure reliable operation of local networks.

The growing presence of these Chinese companies in Africa is essentially explained by the comparative advantages they have over their competitors, in this case the political and financial support of the Chinese central government which allows them to offer very competitive prices.

The report indicates that the contracts won by these companies are always accompanied by loans at preferential rates provided by Chinese financial institutions (including China Exim Bank, China Development Bank and China-Africa Development Fund), to African countries which acquire equipment and Chinese telecommunications infrastructure.   

Between 2014 and 2018, Chinese funding dedicated to the development of telecommunications networks in Africa varied between 300 million and more than a billion dollars per year, sometimes exceeding the funding mobilized by African governments themselves for the sector.

Even in 2020, when the overall amount of loans provided by Beijing to African countries fell sharply, financing directed towards the telecommunications sector increased from the previous year to $568 million.

Espionage and cybercensorship

The report, however, reveals that the growing presence of Chinese telecommunications companies on the continent carries risks and challenges related to sovereignty, digital security and political freedoms despite its undeniable positive effects on improving connectivity and reducing of the digital divide.

Many African countries have indeed decided to transfer all government data and digital platforms that were hosted on foreign servers, mainly in the United States and Europe, to data centers located on the continent, built by data processing companies. Chinese telecommunications. This transfer, often presented by African governments as a measure aimed at strengthening digital sovereignty, raises concerns about the security of this data managed using technologies developed by Chinese companies.

While the security of telecom networks and information systems is essential to guarantee the autonomous exercise of State policy and to establish the confidence of the various actors in the major socio-economic applications of information technologies, these apprehensions relate to the access of the Chinese government and party-state to immense quantities of sensitive data on its African partners.

There are also concerns about spying on citizens and cyber censorship that authoritarian African regimes may resort to, with the help of Chinese companies.

Megatrends Afrika also notes that the latter are already collaborating with certain African governments to filter and monitor Internet use in order to track down people who use online platforms as a space for the expression of dissenting opinions or protest, recalling that Ugandan opponents had for example warned in 2019 of the high potential for abuse and human rights violations of an invasive surveillance system purchased by the government from Huawei.

The report suggests, in this context, that greater involvement of European telecommunications companies in Africa could create a more transparent environment for telecommunications investment on the continent and allay concerns about cybersecurity, espionage and digital sovereignty, given that the European Union has very strict regulations in these areas.

Source: Agence Ecofin

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