CGD in the News

Reality Check: Is China burdening Africa with debt? (BBC News)

November 06, 2018

By Reality Check team

From the article:

Africa is facing a looming debt crisis, say leading development economists.

"Almost 40% of sub-Saharan African countries are in danger of slipping into a major debt crisis" according to the Overseas Development Institute, ahead of a major conference on debt being held in London this week.

And the relationship between African nations and China is often seen as a significant part of the problem.

…

Compared to institutions such as the IMF, World Bank and Paris Club (a group of 22 creditor nations not including China,) loans from China are seen by some as much quicker, cheaper, and come with fewer strings attached.

The United States in particular has been highly critical of China's approach.

Earlier this year, ahead of a visit to Africa, the then US Secretary of State, Rex Tillerson, said China's lending policy to Africa "encouraged dependency, utilised corrupt deals and endangered its natural resources".

China's response was forthright. Its ambassador in South Africa, Lin Songtian, said China was proud of its influence in Africa and that Mr. Tillerson's comments were part of a smear campaign by the United States.

"China is just like any other lender," says Gyude Moore, a former Liberian Government official, and "China's strategic interest is in African countries paying back debts."

There are many examples of China supporting programmes to help with debt repayments, says Mr. Moore, who's currently a visiting fellow at the Centre for Global Development.

Read the full article here.