AfDB laments Africa’s growing debts to China

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African Development Bank, AfDB has expressed concern over the growing size of Africa’s debts to China, saying that the trend must stop to avoid crises for the continent in the nearest future.
Senior Director, AfDB Nigeria, Mr. Ebrima Faal, who spoke at the unveiling of African Economic Merit Awards, AEMA world plaque and award nominees at the weekend in Abuja, put the total Chinese loans to African governments at $94.4 billion between 2000 and 2015 with Angola and Ethiopia as the two highest beneficiaries.
Faal, who was represented at the occasion by the banks Regional Procurement Coordinator, Mr. Baba Imoru Abdulai, noted that China offers more loans to African countries in order to access their natural resources.
He, however, commended China for its commitment towards development of Africa, especially going by its latest financing of infrastructures in the continent with $120 billion in three years.
There are growing concerns that lending rather investments dominates Chinas relations with Africa. A decade ago, observers worried that Chinese loans would create a new debt crisis. This has not happened, at least not yet.
As of 2014, for most government borrowers, debt levels were still moderate, although there were exceptions such as Angola and Ethiopia. With the downturn in commodity prices, some countries that borrowed heavily from China have turned to the IMF (Angola and Ghana, for example).
Others have suspended, failed to draw down, or cancelled their credit lines from Chinese banks (Niger, Ghana, and Chad).
Data from the China Africa research centre shows that between 2000 and 2015, a total Chinese loan to African governments was $94.4 billion with Angola and Ethiopia as the two highest beneficiaries. Besides the size of the loans, there have also been concerns that Chinese offer more loans in order to access natural resources, he stressed.
Faal further informed that the China-Africa bilateral trade has been steadily increasing over the past 16 years, saying that since 2009, China has surpassed USA as Africas largest trading partner.
He said from a mere $765 million in 1978, the import and export value of China-Africa trade amounted to US$170 billion in 2017, an increase of more than 200 times.
On foreign direct investment, FDI, he said the Chinese investment in African countries has grown over 100 times in the last 10 years from $0.5 billion in 2003 to $39.9 billion in 2016.
He also informed that Chinas infrastructure development financing has moved to a global level with the establishment of the Asian Infrastructure Investment Bank, AIIB and the New Development Bank, NDB to expand infrastructure financing.
Faal added that the AfDB could explore opportunities for strategic partnerships with AIIB and NDB, saying AIIB has received broad acceptance and subscription from some of the advanced economies, including Germany, Canada and others.
He said currently, Chinas support to Africas development through the AfDB is being channeled through Africa Growing Together Fund, AGTF, stressing that as the implementation of the Fund accelerates, the bank could explore the possible increase of resources to the Fund.
Also speaking, a co-founder of Red Media, Mr. Adebola Williams said Africa must borrow, not money from China, Singapore and some other advanced countries, but their economic discipline and other developmental efforts to move the continent forward.
He said: Our economy cannot be in the hands of those who dont want to invest technology, those who are not ready for climate change, and those who are not prepared for the challenges of 2050 when we will have the highest population in the world, and so on.

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