Some African Countries have started asking hard questions about Chinese honeymoon with Africa. It is our goal here to continue to warn our African leaders of the looming financial crisis with China. African leaders must stop this exponential borrowing binge from Communist China. China does not practice free and fair trade.
The Chinese trade deficits with their trade partners are often unrealistically high in their favor. For many years the US trade deficit has been increasing year in and year out until Trump stood his ground and forced China to renegotiate the terms of its trade relations with the United States, leading to a new US-China trade deal.
According to BBC News, “The World Bank now classifies 18 countries at high risk of debt distress, where debt-to-GDP ratios surpass 50%. The total amount of external debt for the continent is estimated at $417bn (£317bn).” Most of these countries are in Africa
An article “Understanding Sino-African Relations: Neocolonialism or a New Era”, published by the Institute of International Affairs described AfricanTrade relations with China as another example of neocolonialism a subject which Kwame Nkrumah in his infinite wisdom talked about more than 3 decades ago.
Another article on African Development Vol XL No 3 has added to this neocolonialism theory when it stated, “Notwithstanding China’s long solidarity with Africa throughout the liberation struggle, and its contribution to the continent through foreign direct investment, infrastructure development, trade and bilateral aid, some of its recent engagements with the continent have raised questions of neo-colonialism tantamount to those in the North-South relations”
Africa sought and received political independence some may also argue that much work needs to be done for Africa to receive economic independence from their colonial masters as well. Now a new battle needs to be fought with another neocolonial master-China. But the blame for being entrapped in this debt burden rests squarely on the shoulders of African leaders.
Here are some African countries that owe China just to mention a few, Angola ($25 billion), Ethiopia ($13.5 billion), Zambia ($7.4 billion), the Republic of Congo ($7.3 billion), and North Sudan ($6.4 billion) Republic of Congo, Niger, Djibouti, and others owe China 20% more of their GDP.
According to the New York Times, Apr 29, 2020 – China holds about a third of Africa’s sovereign debt. Many African countries have started asking China for debt forgiveness like the one they received from the IMF but such requests have not received any positive response from China. We hope China does grant Debt Relief to African countries whose hopeless and clueless leaders got such loans due to their individual selfishness and greed. Part of the money may have gone to their personal pockets and cronies alike.
As of Sept 3, 2019, Nigeria with all the multilateral agencies put together owe China 43.92 percent of the nation’s external debt according to Business.a.m. The total Nigerian foreign debt has mushroomed to $86 Billion since Buhari came to power. According to financial experts, it takes about 50% of the Nigerian GDP to service these loans.
“As of 2018, around 20% of all African government debt is owed to China. Due to the magnitude of these debts, some experts argue that China holds a special role—as it is in the driver seat”—for the debt relief campaign for Africa. French President Emmanuel Macron has even personally called for China to provide debt relief for African countries” (Source Brookings).
Due to anti-China Sentiment growing in Africa, following the racism and discrimination against Africans in Guangzhou, resulting from Coronavirus, China has suspended on a temporary basis the debt payments from African Countries but says there won’t be a blanket Debt fogginess to African Countries. It is very likely that China may never forgive these loans, and African leaders and governments that secured these loans, in the final analysis, may never be forgiven by their countrymen and women for helping to impoverish their people.
Africa Business World Report