When you see African presidents having a handshake with Chinese president Xi Jinping, you should be genuinely concerned. Chinese dealings in Africa are being viewed in a skeptical way; with many analysts criticizing governments for falling into Chinese debt trap. Most of these debts are acquired through proper means making some African states suffer great consequences.
Other analysts are also suggesting that China are slowly colonizing African states through debt which is making bodies like IMF getting concerned about these deals. If nothing is done soon to regulate these loans, Chinese colonialism is going to be a reality.
Here is a list of the top 10 African countries with the largest chinese debt.
It is reported that $3.5 billion has been lent by China to Ghana between 2000 and 2017. The government confirmed in 2018 that the country owes $2.060 billion to China, the Export-Import Bank of China and the China Development Bank.
Some of the loans financed by China are also said to have bypassed parliamentary scrutiny, forcing the opposition to involve the IMF to help look into the country’s debt.
CARI reports that $6.5 billion has been lent by China since 2001 with the latest significant loan announced in 2014. This puts the debt to be paid at $3.2 billion after China has been talks with the Sudanese government to delay repayments and even write some of the debts due to the political instability in the country.
8. The Democratic Republic of Congo (DRC)
The country entered into $10 billion resource-financed infrastructure agreement with China in 2007 where copper and cobalt mining licenses would be allocated to a Chinese consortium. This deal was however renegotiated to $3 billion when DRC was flagged as it did not have the overhead to take $ 10 billion in debt.
Because of the unending conflict in the country, the debt is yet to be recovered and it currently stands at $3.4 billion.
There seems to contrasting figures being released by Nigerian media houses and the government itself. The media reported that the country received two huge tranches of aid from China: $3.1 billion in and $6 billion for infrastructure in the last four years. However, the Debt Management Office report stated that Nigeria had a total indebtedness of $3.22 billion to China.
If we are to use the media’s report, that means each Nigerian, of a population of 198 million, owe China $41.83.
The China Africa Research Initiative reports that $5.6 billion has been lent by China to Cameroon between 2004 and 2017. The country is said to owe China $4.3 billion.
What we did find interesting is that the Chinese wrote off $78 million of the debt; something which was done behind closed doors and has raised lots of suspicion about China’s deals.
Well, the debt crisis in Zambia is pretty bad. If we were to rank countries according the adverse effects the loans have, Angola would top the list. The country has an estimated debt of $6 billion.
What makes the situation bad is that most loan deals signed stated that the mode of repayment came in the form of either cash or claiming of firms as collateral. The latter has been happening in the past few years with China taking control of firms. It is also being reported that ZESCO, the national power utility, was being taken over by China; same case with ZNBC, the country’s national broadcaster. Yikes.
Again, if we were to rank countries according to how bad the loans are, Kenya would come second. It is being reported that Kenya’s State Broadcaster KBC risk auction should the government fail to pay $6.2 Billion of China’s loan. Other firms also at risk are East African Portland Cement and Tana & Athi Rivers Development Authority.
An insult to injury is that the president went to China to borrow more money, which was thankfully rejected. Remember, China is only one of the many countries the Kenyan government owns. With corruption and looting being the order of the day, things are only foreseen to get worse.
3. Republic of Congo
The country popularly known as Congo-Brazzaville has an estimated debt of $7.3 billion. This debt has been attributed to the high level of corruption in the country and sharp decline of oil prices in recent years.
CARI reports that Ethiopia owes China $9.7 billion which came about to the dozens of mega infrastructure developments; some of which are yet to make returns. The debt was actually higher than the stated figure above, some reporting it to be at $13.5 billion.
China has however cancelled all interest-free loans it had advanced to the country by the end of 2018, relieving them of some burden.
Here are two contradicting truths; Angola is the second largest producer of oil in Africa but it is the most indebted African country to Africa. It has an estimated debt of over $25 billion. That is a lot.
Most of Angolan oil is going towards the repayment of the debts; which means country doesn’t make much money from the oil exports. What’s even worse is that the oil prices have been going down and China’s demand for oil is only going up. This puts Angola’s economy between a rock and a hard place.
Do you believe that China is slowly colonizing Africa? Are African states going to be slaves of debt? Let’s discuss in the comments below.