According to the China-Africa Research Initiative, 50 out of the 54 countries in the Africa continent, have taken loans worth USD 153.4 billion from Chinese agencies between 2009 and 2019. China’s influence in African countries has been a topic of considerable discussion and analysis in recent years with China’s engagement growing significantly over the past two decades, with the Chinese government and Chinese companies playing an active role in various sectors across the continent.
China frequently provides financial support for the development of various infrastructure projects, including roads, railways, dams, ports, and airports. In certain instances, Chinese state-owned enterprises engage in the construction of extensive infrastructure systems within African nations, often in return for mineral resources or hydrocarbons, such as oil.
This article would talk briefly on some African countries that are being influenced by China.
China’s influence in Uganda, including the takeover of an airport, is a topic that requires careful examination. China has been involved in various infrastructure projects in Uganda with loans and investment which have helped fund the development of several infrastructure projects, such as roads, railways, and airports.
Recently, the Ugandan government’s failure to repay a loan led to the Chinese lender, Export-Import Bank of China, also known as Exim Bank, assuming control of various assets in the country, including the prominent Entebbe International Airport, which is the country’s main international airport and handles over 1.9 million passengers per year.
China’s increasing presence in Uganda and Africa at large has attracted attention and debate. Critics argue that Chinese investment may come with political strings attached. China owns about 20% of Uganda’s debt, equivalent to about $1.6 billion.
The International Monetary Fund (IMF) recently announced that Ghana’s four collateralized loans from China could put the government at risk of losing future energy sales and a portion of the earnings from its mineral resources. Over the past two decades, Ghana has relied on Chinese loans as a consistent source of finance for large-scale projects with Accra has accumulated nearly $5 billion from at least 41 Chinese loans
However, Ghana is now debt-trapped and facing its most significant economic crisis in a generation. The country’s external debt portfolio now exceeds $30 billion, due in part to many years of almost unrestrained borrowing.
In light of this, it is clear that Ghana’s reliance on Chinese loans has had both positive and negative consequences. On the one hand, these loans have helped to finance important infrastructure projects that have boosted economic growth. On the other hand, they have also contributed to Ghana’s current debt crisis.This poses the thoughts to carefully consider the risks and benefits of Chinese loans before entering into new agreements.
According to a recent analysis, Nigeria’s debt to China has increased from $1.39 billion in 2015 to $4.29 billion in 2022, representing a staggering 209% increase in just eight years. Data from the Debt Management Office (DMO) also states that China loans account for 84.73 percent of Nigeria’s bilateral debt.
Low revenue and rising interest payments have left Africa’s largest economy with almost no money after paying interest on debt.The impact of China’s influence in Nigeria is complex and with the incessant borrowing, there is room for consensus on how this influence which is likely to grow in the years to come is detrimental to Nigeria and the African country at large.
As an African country, Angola gives an example whose approach limits the impacts of China in its domain like other African countries. Angola is a major oil producer and exporter, and China is one of its largest customers. In 2020, Angola was the fifth-largest provider of oil imports to China.
As part of its financial lending to Angola, China has provided oil-backed loans to the country. These loans are guaranteed to be repaid by the proceeds of Angola’s oil sales from its state-owned oil company, Sonangol. The oil-backed loans have helped Angola to finance infrastructure projects and economic development. However, they have also raised concerns about debt sustainability and the potential for China to gain control of Angola’s oil resources.
The relationship has however changed drastically since it was first forged in the early 2000s, as the new Angolan model today has devised means to drop Chinese debt-trap tactics.
Currently, South Africa owes China an estimated 4% of its annual GDP. The country received multiple loans from China, some of which have been criticized severally. Despite South Africa occupying the leading position through the usage of advanced technologies such as deep-well mining, amongst others, the country fell into US$14.7 billion promised by China for their infrastructure projects.
The poised questions on the possibility of the chinese debt-trap in Ghana as in the rest of the African countries.
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