Chinese dealings in Africa are being viewed in a sceptical way; with many analysts criticizing governments for falling into the Chinese debt trap. Other analysts are also suggesting that China is slowly colonizing African states through debt which is making bodies like the IMF getting concerned about these deals.
Here is a list of the top 10 African countries with the largest Chinese debts. Note that these figures are estimates as of June 2019 and may not reflect current figures.
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 talking 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 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 critics found suspicious 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.
Angola would top the list if the list was to rank countries based on the adverse effects the loans have. The country has an estimated debt of $6 billion.
What makes the situation worse 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.
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.
Things have been looking up for the Standard Gauge Railway returns as they netted more profit in 2019 (Ksh 8.8 Billion). This new report indicates that the project is on its way to breaking even and economically viable
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 a sharp decline in 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.
Most of the Angolan oil is going towards the repayment of the debts; which means the 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.