The response to debt distress in Africa and the role of China
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White South African Murders page: Murders of Whites from 1996 to 2016
On this page, are collections of the names and details of Whites who were murdered during the period 1996 to 2016. The true number of Whites killed in South Africa since 1994, is stupendous, and nobody has got even a fraction of all the names. But this is the most comprehensive collection that the Boere State Party has currently. My own attorney told me that he thinks 100,000 Whites have been murdered during Black rule.
[This is a British analysis. Jan]
The economic consequences of the COVID-19 pandemic and Russia’s invasion of Ukraine have undermined the ability of many African nations to service their sovereign debts. At present, 22 low-income African countries are either already in debt distress or at high risk of debt distress.
Chinese lenders account for 12 per cent of Africa’s private and public external debt, which increased more than fivefold to $696 billion from 2000 to 2020. China is a major creditor of many African nations, but its lending has fallen in recent years and is set to remain at lower levels. This situation is likely to worsen over 2023, limiting the ability of African nations to raise the necessary finance to deliver broader social improvements for their populations and respond to climate change.
China did not cause African debt distress in most cases, but it is key to finding a solution. Despite growing political and economic tensions, China and the West have a strong mutual interest in cooperating with each other, and with African nations and institutions, to tackle the challenge of debt distress.
The response to debt distress in Africa and the role of China
Summary
01 Introduction
02 Case studies of Chinese lending to Africa
03 China’s evolving approach to African debt relief and future lending
04 The current multilateral approach to addressing African debt distress
05 Recommendations
06 Conclusion
About the authors
Acknowledgments
Summary
China became a major creditor of many African nations from the start of the century to 2016. But since then, the scale of its lending has decreased – with the volume of new Chinese loans to African governments dropping from a peak of $28.4 billion in 2016 to $8.2 billion in 2019, and falling again to just $1.9 billion in 2020 (although the latter reflects the exceptional circumstances of the pandemic). While China’s future state-backed lending is set to remain at lower levels, it is likely to be better coordinated among Chinese lending institutions and have greater emphasis on debt sustainability.
The nature and purpose of China’s past lending to African nations have varied considerably, both between countries and over time, including oil-backed lending, more conventional infrastructure loans and financing linked to strategic political relationships. China’s domestic economic needs, rather than foreign policy or military objectives, were for the most part the driver of this activity. African actors have also played, and continue to play, an important role in shaping the nature of this financing.
The economic fallout, including a sharp rise in interest rates, from the COVID-19 pandemic and Russia’s full-scale invasion of Ukraine has undermined the ability of many African nations, such as Djibouti, to service their sovereign debts. Twenty-two low-income African countries are either already in debt distress or at high risk of debt distress. The overall situation is likely to worsen over 2023 and limit the ability of many African nations to raise the necessary finance both to deliver broader social improvements for their populations and respond to climate change.
Africa’s total external debt increased more than fivefold between 2000 and 2020 to $696 billion – of which Chinese lenders accounted for 12 per cent. China did not cause African debt distress in most cases, but it is key to finding a solution. While China remains wary of the Western dominance of international financial institutions (IFIs), it has cautiously come to see some benefits of multilateral cooperation with Western governments and IFIs in handling debt distress.
Despite growing political and economic tensions, China and the West have a strong mutual interest in cooperating with each other and with African nations and institutions, such as the African Union, to tackle the challenge of African debt distress.
Attempts to tackle debt distress in Africa urgently need to be separated from broader geostrategic competition. This paper recommends a three-part plan to be taken forward initially by the G7 under the Japanese presidency in 2023, but which ultimately needs to be embedded in the G20. The aim should be to establish a dialogue on Africa’s long-term investment needs, formulate an understanding between the West and China, and end the blockages in the current multilateral framework for dealing with debt distress.
Source: https://www.chathamhouse.org/2022/12/response-debt-distress-africa-and-role-china
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