Due to the COVID-19 pandemic, there has been a drag in economic growth and the flow of funds for current infrastructure development projects in Africa. As a result, some African countries find it strenuous to repay their loans to the Chinese government, thus renegotiating debt.
China is, without a doubt, a global force. According to Carnegie Endowment for International Peace, between 2000 to 2019, “Chinese financiers made 1,141 loan contracts with African governments and their state-owned firms”. The country also lent $143 billion to African governments and state-owned companies between 2000 and 2017.
According to research conducted by Aid Data at the College of William & Mary, African borrowers account for 47% of the one hundred loan agreements between Chinese government organisations and twenty-four other low- and middle-income nations in the sample. This indicates how African countries are heavily yoked with Chinese debt.
Here is the list of the top 7 African countries with the most Chinese debt.
Angola is the African country with the highest debt to China. It owes over $25 billion, and as a result, the majority of its oil is used to repay Chinese loans.
With an estimated $13.5 billion debt, the Eastern African country is second on the list. The majority of the debt was utilised to finance infrastructure projects in the country. Due to repayment concerns, debt levels have stalled specific projects in the country. The parties reached a new framework for debt repayments to make it flexible.
Kenya has a debt of about $7.9 billion. The debts were incurred during ex-President Uhuru Kenyatta’s administration. The money was borrowed to complete its infrastructure projects. Due to a large sum of money that has been lost to corruption, Kenya, which is popularly known as the economic powerhouse of East Africa, struggles in repaying its debts.
Republic of Congo
The Republic of Congo has $7.5 billion in debt. Corruption is said to be responsible for the rise in debt of the country to such alarming heights.
The war-torn country owes $6.4 billion in debt to China. Even though China has wiped off its debt from 2015, it still has billions to pay.
The landlocked country is further entangled in Chinese debt’s tendrils as it owes $6 billion. The Chinese have funded many initiatives in the nation. China is acquiring Zambian companies as part of repayment arrangements. There have been claims that China is receiving ZESCO, the country’s national power provider, and ZNBC, the country’s national broadcaster.
With a bill of $5.5 billion, the West African country is ranked seventh on the list. China is, however, discussing cancelling a portion of this debt.