News & Analysis: China-Africa relations
“Nigeria, Ghana, Kenya, South Africa, and others have all announced new borrowing initiatives that will only exacerbate the current financial crisis. And what’s worse is that they’re largely planning on using the proceeds from raw material sales to repay those loans. But by the time those loans come due, commodities won’t be nearly as valuable as they are today.”
“After months of hesitation, Chinese Foreign Ministry spokeswoman Hua Chunyin delivered a surprise announcement last Friday that the government will join the COVID-19 global vaccine alliance known as Covax. “
“Africa has recorded more than 1.5m cases and counting, though in terms of infections and deaths, we have fared better than most regions. Our economies, however, have not been spared. Across the continent, governments are facing falling revenues, rising expenditures, increasing debt distress, and significant reversals in development indicators.”
“As more African countries have looked to China for financing and technical support to rapidly boost infrastructural development, there have been loud musings about the scale of China’s lending to African countries as well as the Asian giant’s motives.”
“The Ministry of Health and Population recently announced that it is conducting clinical trials in the third phase for two vaccines in cooperation with Chinese pharmaceutical company Sinopharm Group.”
“Foreign bondholders are minded to block Zambia’s plans to suspend interest payments without assurances of equal treatment with large lender China, say people familiar with their plans, indicating that the test case for a potential string of pandemic-related defaults across Africa could prove contentious.”
“Governments on the continent may be forced to cede control of key assets as Beijing swops debt for equity. African debt was already hitting worrying levels in 2019, but the pandemic has made the problem much worse, in ways that will not only affect Africa, but also one of its biggest creditors, China.”
“Like many African nations, Zambia has borrowed heavily from China to finance projects under Beijing’s Belt and Road Initiative. Zambia is seeking US$1.3 billion in financial assistance from the IMF and a six-month moratorium on interest payments on US$3 billion worth of Eurobonds.”
“We believe that the Covid-19 pandemic represents an opportunity for China in Africa. Temporarily halted by travel restrictions and disruption of supply chains, the Belt and Road Initiative launched in 2013 by President Xi Jinping could then be back on track.”
“Ethiopian Prime Minister Abiy Ahmed toured a new Chinese-Ethiopian joint venture that will be able to produce up to 10 million COVID-19 test kits per year. The new test kits will be used to help mitigate the spread of the virus domestically and will also be made available to other African countries who have struggled to build robust testing regimes.”
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