China’s Mediation Diplomacy Hits A Roadblock In Africa – Analysis

By Samir Bhattacharya

China’sGlobal Security Initiative (GSI), launched in April 2022, signals a clear break from the country’s traditional non-interference policy and reflects its aspiration to be a global security provider. But as China stumbles to protect its multi-billion-dollar investments in Africa, this may dampen Beijing’s increasingly assertive image. Successful mediation of the conflict in West Africa’s Sahel region will be a crucial test of Beijing’s diplomatic efforts in Africa.

In early 2024, China National Petroleum Corporation (CNPC) completed a massive2000-kilometre pipelineconnecting Agadem in eastern Niger to the port city of Seme-Kpodj in Benin, aiming to produce90,000 barrelsof oil per day. This is over fourfold what Niger currently produces for itsdomestic marketand would significantly increase the country’s oil exports.

The pipeline was scheduled to open by 2021, but the pandemic and regional instabilities delayed this by almost three years. The July 2023 military coup in Niger resulted in severe sanctions from theEconomic Community of West African States(ECOWAS). The delays resulted in project costs exceeding the previouslyestimatedUS$5 billion. Around the same time, Niger left the ECOWAS and joined Burkina Faso and Mali to form theAlliance of Sahel States, an alliance of three West African junta-ruled nations.

Undoubtedly, the economic costs of this crisis are incredibly high for China. With an investment of over US$5 million, the pipeline project was the most significant investment CNPC has made in a cross-border crude oil pipeline. The junta government of Niger also borrowedUS$400 millionfrom CNPC to pay off the debt it has accumulated since the military takeover. The interest rate of the loan is7 per cent, which Niger agreed to pay back with the export of an equivalent amount of oil within a year.

The pipeline would have transformed Niger’s economy, as China had agreed to purchase all the country’s oil. Moreover, this oil revenue would also ensure the survival of the country’s junta regime.

China has been spearheading negotiations under the Benin–Niger inter-state steering committee. Chinese diplomats and CNPC representatives have met with government officials in both West African countries toresolve the dispute. Given its investments and strategic interest, CNPC is leading the mediation efforts while Chinese state is playing a secondary role. This also marks a significant departure in Chinese diplomacy led by private sector.

Benin was opposed to the coup but agreed to normalise cross-border oil flows on 16 May 2024 after intense negotiations. But even before the pipeline started functioning, the old Niger–Benin rivalry reared its head again. On 9 June, coup leader Abdourahamane Tiani issuedan order to shut downthe section of the pipeline that was supposed to transport refined oil towards Benin. And when Benin sentenced three Nigeriens toeighteen months in prisonfor allegedly gaining unauthorised entry into the port of Seme, the animosity between the two nations intensified manifold.

China is not solely concerned with ending the conflict between Benin and Niger. The rebel group Patriotic Liberation Front also poses severe threat to internal security in Niger. In June 2024, the groupclaimed responsibilityfor damaging a significant part of the pipeline and threatened further damages unless Niger withdrew its deal with China.

China has alsobeen the target of several regional jihadist assaults. The mostrecent incidentoccurred on 18 July 2024, when three CNPC employees were abducted by members of Jama’at Nusrat Al-Islam Wa Al-Muslimeen, an al-Qaeda affiliate group. Troubled by the terrorist attacks on its facilities and the simultaneous pipeline closures, CNPC decided to suspend its Niger operations.

Every day the pipeline is shut off costs CNPC someUS$9 million. Its partner, the West African Oil Pipeline Company, also loses approximatelyUS$1.3millionper day, while Niger also misses out on dailyUS$1.8 million in oil revenues. Niger is already suffering under the weight of economic sanctions only lifted earlier this year. If CNPC ceases operations, the country could face bankruptcy.

As a way out, Niger is considering re-routing its oil exports away from Benin — either through Chadto join up with theChad–Cameroon pipeline, which runs to theport of Kribi, or by running the pipeline to Nigeria’s coast.

But the possibility of re-routing appears unrealistic as China is unlikely to invest in another large-scale project before recovering the costs of the existing one. The new pipeline is anticipated to cross the Lake Chad region, home to the terrorist organisationBoko Haram. China will undoubtedly refrain from funding a project with even higher risks than the present one.

Although not significantly valuable compared toother international projects, it is still important for China to recover its investment in Niger and preserve its energy security. Its experience in West Africa, navigating between inter-state rivalry, domestic instability and terrorism, will likely make Beijing considerably more cautious in the future when making investment decisions.

The situation underscores the problematic configuration of China’s energy diplomacy in West Africa. Going forward, Beijing intends to becomemore assertivediplomaticallyin Africa overall as it negotiates the turbulent political waters of the region.

• About the author: Samir Bhattacharya is Associate Fellow at the Observer Research Foundation in New Delhi, India.
• Source: This article was published by East Asia Forum