Global Gateway: How EU's anti-China strategy is failing in Africa

 President William Ruto and his wife Rachel greet his Chinese counterpart Xi Jinping and the latter's spouse Peng Liyuan at the Great Hall of The People in Beijing, China. [PCS]

The Global Gateway was meant to be Europe’s grand counteroffensive against China’s growing influence, but three years after its launch, the investment initiative is at risk of becoming a financial sinkhole.

Beyond mere announcements, tangible progress has been scarce—especially in Africa. The criticism is widespread.

The EU has pledged a total of €300 billion (Sh43.2 trillion) to the programme, with €150 billion earmarked specifically for Africa.

Brussels envisioned a new era in relations between Europe and its southern neighbour through a series of large-scale infrastructure projects, ranging from a data cable linking Europe and North Africa to hydrogen production in Namibia and a cross-border power grid for East Africa.

The project’s financing is set to come from a blend of EU funds, member state development budgets, and private investments.

However, the private sector has shown little interest in committing funds.

Both European and African experts and business leaders have expressed frustration with the initiative’s slow pace, lack of clarity, and poor coordination.

The main issue: lack of awareness.

“Companies and partner countries don’t even consider Global Gateway as a funding tool. And even if they do, they have no idea whom to contact,” says a representative of German industry.

In Kenya, one of Africa’s largest economies and a focal point for several Global Gateway projects, many are unfamiliar with the initiative. Kenyan business leaders point out that private sector investments are also lacking.

Consultant’s report that billions of euros in Brussels remain idle due to the absence of necessary investments from the private sector.

Visibility is a problem, says Paul Walton of the Africa-Europe Foundation. The Brussels-based organisation analyses relations between the two regions.

“It requires scale, prestige, and flagship projects,” Walton notes. “Global Gateway’s focus is too broad. The initiators need to concentrate on sectors that are already functioning well and can generate quick successes.

“This is the only way to attract the necessary private-sector investment.”

Such investments are crucial to making the initiative a success. Global Gateway was supposed to be a blueprint for Europe to forge more sustainable ties with the rest of the world, EU Commission President Ursula von der Leyen promised.

With these words, the European Union launched the global investment programme in 2021, aiming to promote green transformation and digital development in just six years—in line with the European Green Deal’s climate strategy.

Impressive list

Today, the initiative encompasses approximately 225 projects, with 121 of them located on the African continent.

The list of proposed undertakings appears impressive, but Europe is still far from implementing them. Yet the timing has rarely been more favourable.

For years, China has significantly expanded its influence across the African continent, investing close to a trillion dollars and becoming the primary trading partner in Sub-Saharan Africa.

Although loans from China amounted to $4.6 billion (Sh593 billion) last year, according to data from the Global Development Policy Center in Boston, they were well below the record $28.4 billion (Sh3.7 trillion) of 2016.

At the same time, criticism of Chinese projects has been growing, particularly regarding environmental standards, human rights, and high interest rates.

Instead of seizing this opportunity, Europe remains stuck in its traditional development strategy, argues Kenyan economist James Shikwati from the think tank IREN.

While some showcase projects like the “Medusa” data cable—intended to connect Morocco, Algeria, Tunisia, and Egypt via a 7,100-kilometre fibre-optic network to Portugal, Spain, France, Italy, and Cyprus—are promising, many others on the EU-Africa list still lean more toward development policy than market economics.

“A large portion of the funds is still directed at women’s empowerment, education, and European values,” says Shikwati. What’s needed, however, are market-oriented approaches.

This is echoed by numerous entrepreneurs who have been active in Africa for years.

Oliver Hermes, CEO of the Dortmund-based engineering company Wilo, shares this perspective. “With its vast natural and human resources, the African continent will grow into a new economic power in the 21st century,” he asserts.

Last year, Wilo opened a manufacturing plant in Kenya, marking its 30th year in Africa. Hermes argues that, to stay competitive and offer countries viable cooperation options, business and politics need to collaborate more closely.

To mobilise the necessary private-sector funds, quick successes are now crucial, emphasises Walton of the Africa-Europe Foundation.

One positive example is the healthcare sector. Here, Global Gateway has successfully generated €1.3 billion (Sh187 billion) for local pharmaceutical production in Africa.

Concrete projects are underway in Senegal, South Africa, Ghana, and Nigeria. Last year, German biotech company BioNTech inaugurated the first mRNA vaccine production facility for Africa in Rwanda.

Another promising example is the so-called Lobito Corridor, a railway project linking Zambia’s Copperbelt and the Democratic Republic of Congo to the port of Lobito in Angola.

This strategic project under Global Gateway aims not only to facilitate mining but also to transport agricultural products and establish a digital network.

Negotiations are already underway with the African Development Bank regarding potential funding.

Rebranded

This level of progress is not seen in all projects on the list. Numerous previously planned development measures are now merely being rebranded under the Global Gateway label.

These include the electric bus line “Nairobi Core Bus Rapid Transit Line 3” (BRT 3), which has been in the works for years, but never finished because the government ran out of money for the €347.6 million (Sh50 billion) project.

Now the EU is providing €45 million (Sh6.48 billion) in grants, while the European Investment Bank and the French Development Agency jointly support the projects with €236.3 million (Sh34 billion).

The Kenyan government is contributing on its side with €66.3 million (Sh9.5 billion). This was announced one and a half years ago. Since then nothing much has happened. 

Global Gateway’s core approach is sound, stresses Friedolin Strack, head of international markets at the Federation of German Industries.

“But German and European industries need better information channels and clear contacts for these project initiatives.”

To lift Global Gateway out of obscurity, EU Commission President von der Leyen recently appointed Czech national Jozef Síkela—a former banker and relative newcomer to politics—as director general for international relations and the new head of Global Gateway.

The pressure on him to deliver results is high.