According to the Overseas Development Institute, “Almost 40% of Sub-Saharan African countries are in danger of slipping into a major debt crisis”. This is issue true in part due to the new found partnership between Africa and china.
While there is no doubt that Chinese infrastructural investment in Africa has opened up avenues and opportunities for trade and economic growth, many argue that Chinese loans used to finance these projects are beyond the capacity of most African countries to repay them. Hence, subjecting assets used as collateral to potential seizure by the Chinese.
According to an article that appeared on www.bbc.com, titled, “Reality Check: Is China burdening Africa with debt?”, the International Monetary Fund issued a warning that Africa was headed into a debt crisis. As per the article, 18 countries are at a high risk of debt distress, meaning that their debt to GDP ratio is more than 50%.
Africa’s total External debt is $417bn (£317bn) of which 20 % is owed to china. According to the China-Africa Research Initiative (CARI) at John Hopkins University, “Angola is the top recipient of Chinese loans, with $43.1 billion disbursed over 17 years”. As per CARI, “from 2000 to 2017, the Chinese government, banks and contractors signed US $146 billion in loan commitments to African governments and their state-owned enterprises (SOEs).”
It’s important to note the timeline shown in the data as a period between 2000 and 2017. Some loans may have been paid and others received as well. CARI acknowledges that unlike other countries in the developed world. China does not produce official data of its lending patterns. However, it says on its website that, “Since China does not produce any official data on its lending patterns in Africa, SAIS-CARI staff pull from a variety of other sources, including official websites, central banks, ministries of finance, and Chinese contractors. This desk research is then supplemented by field work conducted by SAIS-CARI researchers, which includes in-person interviews with African and Chinese officials”.
It’s important for African countries to reconsider their engagement with china and focus on how they can grow trade between member states. Our dependence on China will create a possibility of neo-colonialism and an increase in Chinese imperialism in Africa.