News & Analysis: China-Africa relations
“The economic fallout for the continent from COVID-19 is likely to be severe and enduring. This burden falls heavily on countries with a high dependence on commodity exports to China, weak sovereign balance sheets, high debt burdens, and volatile currencies, among other external fragilities.”
“The impasse between the G-20 and international financiers has bolstered the position of Chinese lenders, who hold an additional $64 billion of disbursed credits in Africa alone, and who also are pursuing painstaking restructuring talks. Taken together, the position of the Chinese and the financiers could make it harder for African governments to respond to the pandemic.”
“Given the scale of Africa’s debt crisis, it should be taken as a great reassurance that China, its largest official lender, has warmed to the idea of cancellations.”
“Despite a warm African response to the recent ‘Extraordinary China-Africa Summit on Solidarity Against COVID-19’, not much new came out of the virtual meeting. Crucially, there was no movement on cancellation of the $150bn in concessional loan debt.”
“Western failings and US-China’s tensions led to unfair accusations against the global health body and its Ethiopian boss, Tedros Adhanom Ghebreyesus.”
“‘Coronavirus is mainly a health issue, and our key focus is ensuring that we keep our people safe,’ he said. ‘But this is also an economic crisis because it has resulted in some key sectors hugely affected by lockdowns. We were forced to close our airspace, which affected tourism, a very critical part of our economy.'”
“One of the key questions was, how is China involved? And how much is China also going to be, at the multilateral level, engaging on discussions? How can China make aid more effective? How can China be more transparent? How can China prioritize the same things other donors are aiming to prioritize?”
“While far from unprecedented, African admonishments of foreign partners have rarely been as forceful, sustained, or public. These rebukes are setting the stage for a recalibration of Africa’s ties with China, the United States, and other foreign governments.”
“To date, the Chinese government has made two specific commitments on debt relief. The first was the G-20 Debt Service Suspension Initiative for Poorest Countries reached by finance ministers and central bank governors on April 15.”
“China is widely regarded as Africa’s largest bilateral creditor. The Chinese government, banks and state-owned enterprises are estimated to hold 17 percent to 24 percent of Africa’s external debt. But African countries also owe money to other governments, to multilaterals, and to the private sector. The latter is estimated to hold 30 percent of Africa’s total external debt, upward of $130 billion.”
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