The impact of Chinese loans in Africa much more complex than described
The impact of Chinese lending in Africa is far more complex than is often portrayed. Online research paper, IJSER reported that some scholars argue that Chinese loans have created a debt trap in Africa, and that China is taking advantage of the debt trap to strategically penetrate the African political landscape.
China has recently become a major lender to more than 32 African countries, including Angola ($21.5 billion in 2017), Ethiopia ($13.7 billion), Kenya ($9.8 billion), the Republic of Congo (7.42 billion USD), Cameroon (USD 7.42 billion). 5.57 billion)1 and Zambia reaching USD 11.2 billion in 2019. Nevertheless, the debt that Africa owes to China continues to increase with an annual infrastructure financing gap of more than USD 93 billion.
According to SAIS-CARI researchers, Chinese financiers have so far committed more than $153 billion to African public sector borrowers between 2000 and 2019. This is likely to continue to drive debt on the continent. Research has historically shown that skyrocketing debt has the capacity to compromise the sovereignty of African states, due to the complexity of corruption and frequent political instability on the continent, IJSER reported.
Scholars argue that even the “aid” that China offers to promote education in Africa has serious colonial implications. For example, the thousands of scholarships China offers to African students to study at various Chinese universities are aimed at nurturing and cultivating the next generation of African leaders to remain committed to future Chinese policies towards Africa. Some claim that Chinese loans to Africa mainly provide business and employment opportunities for Chinese citizens and entrepreneurs to work overseas. Indeed, China often imposes most infrastructure development lending in Africa.
The imposition is still in favor of Chinese companies which are mostly “state-owned enterprises”, in order to stimulate the “China exit strategy” which keeps Chinese companies as contractors of various projects financed by Chinese loans, IJSER reported. Companies therefore create employment opportunities for Chinese citizens in Africa. It’s like China handing out money with one hand and taking it back with the other.
Indeed, when Chinese companies build infrastructure projects financed by Chinese loans in Africa, they deprive Africans of the acquisition of skills. Moreover, the bulk of Chinese lending to Africa is offered with the intention of securing Africa’s natural resources. China understands that most African countries have low credit ratings in international financial systems.
China is burdening Africa with unsustainable debt with the intention of leveraging the debt to strengthen its geopolitical control over the continent. This is evident with the use of Chinese roads/traffic signals in several African cities such as Nairobi where China has built road networks, IJSER reported.
China is carrying out a modern form of colonialism at the expense of Africa in order to enable it to become a global player. China is deploying troops to Africa to meet its mineral and oil needs. One example is when the Kordofan oilfields were imminent for attack, the Chinese deployed soldiers to protect the oilfields and their economic interests. (ANI)
(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)