Yohane Mbeeya Moono
An Alumni of the Zambia Institute of Diplomacy and International Studies
Reuters Trained Journalist
Africa is a continent that has promised so much yet has delivered very little. Africa is a continent that has long been plagued by underdevelopment, wars,health challenges such as Ebola,and Malaria among others, as well as food I security that has the Western World feeling the African population is a threat to the long-term sustainability of the World.
The African population stands at 1.4 billion people as of Saturday 19th November,2022 based on thr latest United Nations estimates. This also represents 16.72% of the total World Population. While the Chinese population stands at 1.45 billion people as of Tuesday 22nd November,2022 based on the latest United Nations estimates. This represents about 18.47% of the World Population. Demographically the African Continent is well placed to forge a meaningful assault on the course of its development.
AFRICA’S DEBT TO CHINA
China’s total loans to Africa during the period 2000 to 2018 have been to a tune of $148 billion, mostly in large scale infrastructure projects. During the past five years from 2016 to 2021, around 66% of the loan amounts have been given to the transportation and energy sectors.
32 African countries are currently owing China some colossal sums of money. The countries leading in terms of loans include Angola($21.5 billion in 2017), Ethiopia ($13.7 billion),Kenya ($9.8 billion),Republic of Congo ($7.42 billion),Zambia ($6.38 billion) and Cameroon ($5.57 billion). Africa has almost reached an impregnable debt position.
For many years African countries had always found financial and economic solace in the former colonial masters and financial institutions such as the International Monetary Fund (IMF) and the World Bank. The now ‘independent’Africa has always been at the mercy of these powers. The emergence of China as an economic superpower has brought about significant changes in the balance of financial aid for African countries.
China had long positioned herself as Africa’s number one development partner by offering infrastructure development packages in the loans which African countries are finding so appealing. The bid for infrastructure development is constant driving Africa towards Chinese loans.
Many Africans hold the view that the continent’s low growth rate economically and the low levels of infrastructure development are as a result of the loan conditionalities from the Brentwood Institutions and the Former Colonial Masters.
The Brentwood Institutions have always given concessional loans and financing to projects. These concessional loans always have a long-term repayment period which could span over 1to 20 years depending on the economic grading of a country. The concessional loans from the Brentwood Institutions are given at an 1 to 20% also dependent upon the economic grading of the country and the type of concessional loan.
While China provides an excellent opportunity to countries in dire need of massive infrastructure development. The Chinese loans have a higher interest rate compared to the Brentwood Institutions. However, the Chinese are believed to embed secret clauses in the loan agreements which often times borders on the sovereignty of a country. The Chinese often seek collateral from these countries and they demand key national assets as collateral.
CURRENT STATUS QUO
A number of African countries have sought economic bailout packages from the International Monetary Fund. Among them is Zambia, Ghana, Chad and Ethiopia. These are highly indebted to the Chinese both from the Chinese government and private lenders. These countries have sought an economic programme under the International Monetary Fund in order to restructure their debt repayment programme post the Covid-19 pandemic. Zambia became the first country to default on her debt in the pandemic era.
The idea is that the countries want economic transformation by having more resources invested in the economy. Currently they spend about 40 % of the revenue collection on Debt Servicing which robs the countries from real economic investment. Then they also spend about 50% of the total revenue collection on emoluments. Clearly nothing is left for real economic investment.
Has Africa lost its sovereignty? The Chinese built the New African Union headquarters in Addis Abba Ethiopia and was rumored to have been bugged by the Chinese. However, no evidence was provided to this claim. The Chinese have built many buildings on the continent and handed them over as gifts of the Friendship between China and the African Continent. Among the notable structures on the continent include; the Mulungush International Confernce Centre Kenneth Kaunda Wing in Zambia,the New Zimbabwean Parliament Building in Harare and the Guinea Bissau Parliament building in Bissau among others.
These buildings being built by the Chinese leaves a question of whether Africa has lost its sovereignty. However, another question springs to mind on whether the Chinese are losing their grip on the continent going by the increasing number of African countries going to the International Monetary Fund to be on an economic programme. As well as African countries now more determined to cling to the African Continental Free Trade Area Agreement which emphasizes the promotion of intra-Africa trade.