Geopolitical tensions between China and the West create the danger that indebted African governments will be the victims of power struggles beyond their control.
The size of Chinese lending, in itself, is not enough to cause African debt distress. Loans from China to Africa were declining well before Covid-19, falling from a peak of $28.4bn in 2016 to $8.2bn in 2019 and $1.9bn in 2020. According to Chatham House, Chinese loans account for only 12% of Africa’s private and public external debt.
Neither is the interest on Chinese loans a particular problem. In 2021, private lenders charged African sovereigns an average 5% interest rate, while China and multilateral lenders charged 2.7% and 1.3% respectively.Get unlimited access to our exclusive journalism and features today. Our award-winning team of correspondents and editors report from over 54 African countries, from Cape Town to Cairo, from Abidjan to Abuja to Addis Ababa. Africa. Unlocked.
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