China is Africa’s major trade partner and the Moneylender but critics have accused China of extending unsustainable loans to developing countries. China’s activities in Africa have raised a lot of eyebrows, and the issue of being trapped into Chinese debt is real and ominous. Here, we look at the top ten (10) African countries with the largest Chinese debt.
From 2012 to 2017, Chinese loans to countries in sub-Saharan Africa grew tenfold to more than $10bn per year. Yeah, You read right.
An estimated 20 percent of African governments’ external debt is owed to China, according to the Jubilee Debt Campaign, a charity that wants the debts of developing countries to be written off.
Around 40 percent of African countries are in debt distress compared with 2013, when 20 percent of African countries were at high risk of debt distress, WorldFinance reported.
Whether the officials and government authorities accept it or not, Chinese dealings in Africa are being viewed in a highly skeptical way. The truth is, the menace of falling into the Chinese debt-trap is very real, and it is happening. Africa is slowly being tied to the yoke of Chinese debt. There is no transparency and accountability when it comes to acquiring Chinese loans.
As a result of this, African countries are finding it hard to extricate themselves from the grip of Chinese debt. It means that debt is continuing to pile on and on, unabated, and the repercussions will be dreadful. Some countries are having it worse than others, as will always be the case.
Over the years, China has become one of the biggest African trade partners. The Chinese have invested billions of dollars into the African continent in form of debts given to these countries.
Let see The list:
- Angola: it is the most indebted African country to China. It has an estimated debt of over US$25 billion, with recent direct investments including an assembly plant for fishing vessels, an aluminum factory, and a brewery, according to Bloomberg. Shocking, but that’s the reality at hand. Most of the Angolan oil is going towards the repayment of Chinese debts, despite Angola being the second-largest producer of oil in Africa.
- Ethiopia: All those Chinese infrastructural development projects in the East African country are coming at a heavy price. Ethiopia has an estimated debt of US$13.5 billion which was lent to them between 2000 and 2018 according to data compiled by John Hopkins University School of Advanced International Studies. The debt levels have slowed down some projects due to repayment issues, but there is now a new structure for these debts that makes it a little bit affordable for Ethiopia to repay.
- Kenya: Even after the discovery of oil in the northern part of the country, nothing, in essence, is working towards cutting down the levels of debt to China. Kenya has an estimated debt of US$7.9 billion. The country has been taking money to facilitate the fruition of its infrastructural projects. But a lack of transparency and accountability comes into play, a lot of money has been lost to corruption.
- The Republic of Congo: Congo, which may be popularly known as Congo-Brazzaville, has an estimated debt of US$7.3 billion. Again, corruption has played a major role in ballooning the debt to such egregious levels.
- North Sudan: The conflict-torn country has an estimated debt of over US$6.4 billion. Although China has written off the country’s debt incurred in 2015, it still has a long way to go.
- Zambia: Zambia is increasingly getting mired in the tentacles of Chinese debt. The Chinese have sponsored a lot of projects in the country. The country has an estimated debt of US$6 billion. China is taking Zambian firms as part of repayment plans, and there were reports that ZESCO, the national power utility, was being taken over by China, even ZNBC, the country’s national broadcaster.
- Cameroon: Cameroon has an estimated debt of US$5.5 billion. However, it was recently revealed that China was in talks to cancel part of the country’s debt. But with China, nothing is so certain.
- Nigeria: The West African country has an estimated debt of US$4.8 billion. Nigeria has accepted the Chinese yuan as a reserve currency.
- Ghana: Ghana stands at number 9 with an estimated debt of US$3.5 billion. The country’s opposition has involved the IMF to help look into the country’s debt. In November 2019 China announced that it will finance $2 billion worth of rail, road, and bridge networks in Ghana, and in exchange, China will be granted access to 5 percent of Ghana’s reserves of bauxite — a crucial source of aluminum, CNBC reports.
- The Democratic Republic of Congo (DRC): The DRC could easily be one of the richest countries in the world considering how it is abundantly endowed with precious natural resources and minerals. However, the plundering of these resources has set the country back, including unending conflict. It has an estimated debt of US$3.4 billion. DRC was quick to exchange mineral resources for loans with China.