Africa Wisens Up To China's Neo-Colonialism
Another significant component of China's ambitious plans, the RFI, is running aground after the much-touted Belt and Road Initiative (BRI) scheme. If the BRI was about laying down a transport network with China at its center, the RFI was meant to procure crucial raw materials to keep the "world's factory" running at low costs.
While BRI extended commercial loans to finance infrastructure development projects in developing and underdeveloped countries, Resource Financed Infrastructure (RFI) model secures mineral rights as collateral against financial assistance.
According to the World Bank, "Under a Resource Financed Infrastructure (RFI) agreement, a loan for current infrastructure construction is securitized against the net present value of a future revenue stream from oil or mineral extraction." That is, resource-rich developing countries use "their natural resources as collateral to access sources of finance for investment, countervailing the barriers they face when accessing conventional bank lending and capital markets."