China’s lending activities in Africa have been a topic of debate for years, with some experts and policymakers claiming that China is putting African countries in a debt trap. As of late, the topic has been receiving renewed attention as the COVID-19 pandemic has heightened concerns about African countries’ ability to pay their debts. The U.S. Treasury Secretary Janet Yellen, on her recent visit to Africa, spoke fervently on the topic, accusing China of setting a debt trap for impoverished African countries.
According to a recent report by Business Insider Africa, 12% of Africa’s public and private external debt is owed to Chinese lenders. The total amount of debt owed by African countries to China has increased significantly over the past two decades, rising from $7.2 billion in 2000 to $136.8 billion in 2019.
The COVID-19 pandemic has had a significant impact on African economies, making it even more difficult for many countries to repay their debts. 22 low-income African nations are either already experiencing a debt crisis or are at significant risk of experiencing one. This situation is expected to worsen in 2023, limiting the ability of African nations to raise the necessary finance to deliver broader social improvements for their populations and respond to climate change.
A report released by Chatham House, a UK-based think tank, shows the top 20 recipients of Chinese loans in Africa from 2000 to 2020. However, it is important to note that the figures presented by Chatham House are based on loan commitments and should not be considered equivalent to African government debt.
Here are the top 10 African countries with the highest debt to China, according to the Chatham House report, in millions of US dollars:
Top 10 African Countries with the highest debt to China
- Angola – $42,619 million
- Ethiopia – $13,728 million
- Kenya – $9,980 million
- the Democratic Republic of Congo – $9,150 million
- Zambia – $7,500 million
- Cameroon – $6,580 million
- Sudan – $6,460 million
- Ghana – $6,090 million
- Nigeria – $3,402 million
- Uganda – $2,956 million
It is worth noting that some African countries have already renegotiated their debts with China. For instance, Kenya’s government recently agreed to a debt restructuring plan with China, extending the repayment period of loans worth $759 million. Also, some African countries have looked for alternative funding sources to reduce their dependence on Chinese loans.
Finally, African countries’ high debt burden to China is a significant challenge, and the COVID-19 pandemic has only made it worse. While some countries have renegotiated their debts, others are still struggling to repay their loans. African governments will need to find ways to reduce their dependence on Chinese loans and explore alternative financing sources to drive sustainable economic growth.
Source: https://africa.businessinsider.com
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