What is the impact of the OBOR Initiative on the development process in Africa?
China investments in Africa are already having an impact on short economic growth - building roads, houses, bridges, special economic zones and rail. However, for this infrastructure to be successful over the medium term - African countries need to simultaneously build up their industry which can utilize that infrastructure.
As a result, the picture is more mixed, you have some countries like Ethiopia who have already built foundations for their manufacturing sector and attracted lots of foreign direct investment (FDI). This better infrastructure (e.g. to Djibouti) will enable Ethiopian manufacturers to be more cost competitive and ship goods in a shorter period of time. Government needs to facilitate this industry development, as it will not happen automatically with OBOR infrastructure.
So my opinion is that failing to develop plans to stimulate industry while investing heavily in infrastructure will only make it harder to generate the growth over the medium term that can contribute tax revenues to fund more infrastructure – thereby thwarting the infrastructure-led growth strategy. There is a significant risk that in policy makers’ new-found obsession for infrastructure, they forego efforts and resources to develop industry. But the two must be seen hand-in-hand; even though developing industry is becoming harder in an era of automation that reduces the importance of low-cost labor for manufacturing. Yet, the alternative is far worse; projects laden with bad debt and limited utilization; short-term construction booms followed by protracted busts.
Anyway, OBOR Initiative is just an external cause, it's participants must also spare no efforts and resources to develop industry.