There have been credible reports of talks between the Zambian government and China on handing over the country’s national electricity company, ZESCO to the Chinese due to the inability of Zambia to meet its loan repayment promises. This is expected as China is already in control of the country’s broadcasting company, ZNBC. There are also fears the main airport in Lusaka could be the next target.
Obliviously, Zambia is in trouble. And for other African beneficiaries of Chinese loans, they should prepare for the same possibility in the eventuality that they aren’t able to repay China.
Debt Acceleration is the Plan
China is smart and deliberate about its policy in Africa. It understands the development deficit on the continent and it is strategically using this to keep Africa’s economic future under its arms.
Africa has what China needs to further propel its economy, specifically crude oil and copper. The best way to ensure an abundant supply of these in the future would be to make the depository countries owe it, which it has excellently done so far.
The play is simple. Give staggering loans to inept leaders and keep the details of repayment from the prying eyes of the public. Eventually, if debtors are unable to service their debts, China takes over its collateral which is mostly in national assets. But this does not comprehend the severity of the situation Africa finds itself.
Reports show that a substantial number of African countries have taken Chinese loans since 2000, totaling a whopping $124 billion by 2016. Of course, there have been more after that. But, Africa is only a victim of its own ignorance as the world had severally warned of China’s end goal.
Just last month, the International Monetary Fund (IMF) and the United States advised African leaders of the imperial intentions of China. A core of the Belt and Road Initiative developed by President Xi Jinping in 2013. However, the lack of thought and foresight by African leaders will not let them vet the deal thoroughly before putting ink on paper.
Africa bought the Play
Nearly all major economies in sub-Saharan Africa today are massively indebted to China. What makes this worse is that most of them have poor economic projections for the next few years and will almost certainly have problems servicing their debts.
For instance, around 72 percent of Kenya’s $50 billion bilateral debts are owed to China, with the East African country requesting an additional $3.8 billion extension. Nigeria also recently accrued some $5 billion in loans from China, and Angola still owes about $21.2 billion with a pending proposal for another $4.4 billion.
South Africa should be getting $14.5 billion in Chinese investment soon and another $2.5 billion loan for its embattled national power company, ESKOM. Weaker economies like the Democratic Republic of Congo, Sudan, and Ethiopia have also incurred large debt from China.
The reality in these figures is that the majority of the beneficiary countries will not achieve the intended goals of the loans. This primarily because of corruption and poor economic structure.
How the beneficiary countries will manage to repay China without ending up like Zambia is yet to be seen, especially now that China is responding hard.
Defaulters should not also expect any help as they had from the IMF in 2005, with the Multilateral Debt Relief Initiative that canceled over $100 billion debt for 30 Africans countries. The US has admonished the IMF not to bail out any country having debt servicing troubles with Chinese loans.
It also does not seem like any other bloc will be willing, too, considering the volume of money involved, or in light of risking the US consequences.
A Ready-Made Alternative to Loan?
Now that Africa is having trouble with China, perhaps African leaders could consider prioritizing better financial structuring and eliminate corruption.
The African Union reported in 2014 that the continent lost $184 billion to corruption annually. This was only derived from documented figures three years ago, which logically puts the figure much higher. Whereas, if African countries can plug all leakages, they could generate enough money to finance a substantial part of the many development problems they face.
More so, the excessive expectation on governments to provide jobs, infrastructure, education, and other needs is a driving force for loan procurement.
It is evident that governments cannot provide all that is required to make an economy flourish. In fact, the more it consumes itself in this belief, the greater the problems it creates for the economy.
For instance, transportation and power generation that accounts for most of the spending of Chinese loans can be efficiently provided by private investors.
The same reason telecommunication is solving many problems on the continent without government ownership or the need for loans, is the same reason privatization would work for these crucial sectors.
China has made its intentions to dominate the global economy clear enough for any serious mind to realize. It knows the enormous potentials Africa possesses, and it will go the extra length to utilize them for its selfish mission. Just like Europe did with colonialism.
If African countries should make themselves the stepping stones for China and worse-off afterward, the consequences would be theirs to bear, alone.
Ibrahim B. Anoba is a Senior Fellow at AfricanLiberty.org. Follow his tweets on Africa:@ibrahim_anoba.
What’s the prognosis for the Philippines?
I remember when China financed the Zamtam railway. Zambia had to pay them back in Maze. The Zambian people went Hugary for a very long time.
wake up Africa! Don’t let the Chinese take over your countries and resources!
China is not The West. Europe and the US often gave Debt Relief and wiped the debt of African Nations. So, being used to borrowing, stealing and getting relief, African dictators thought the Chinese would do the same and they would get away with stuffing their Swiss accounts with Chinese cash without consequences. When the wake up call came it was too late. China does not give debt relief: they take assets. And still our African leaders are falling overthemselves to take Chinese money. Do they not learn????
Very soon there is gonna be China town in Zambia. Plus ChinZa babies. Lol Africa
Open your eyes Africa, Europe and America…You are sleeping and a giant is taking over. They will not develop schools, hospitals, farms in Africa like the colons did. They are coming to get minerals and later it will be agriculture lands….It may be to late to reverse the situation. China is building a huge city at Modderfontein…possibly to install their African head quarter for fast interventions and control??. China is too far and Modderfontein is the perfect place for them. Well played clever China! The 21st century will prove to be China century if the West carry on sleeping…
Ssdly,re-emergence of the colonized desiring to experience the comfort of leading colonization.We must wake and defend our African identity and natiral resouces.
Africa is not the West, in fact Africa think it can survive without the West. Now what?
You people are really stupid, you think China is only over Africas-ass? China is everywhere and it is taking what it wants relevant to the continent/country. Look at Sri Lank, Pakistani, Greece etc, those aren’t African countries are they? One way or another every continent and country is falling victim to Chinese debt traps! China has bought so many state owned infrastructure in Europe, it has bought so many ports in Europe and Greece is under Chinese arm-pits as well. So don’t sit and comment as if Africa is the only place Chinese are taking advantage of, in terms of Natural resources, maybe yes, but in Pakistan soon China will establish military base there, China already bailed out Greece with millions if not billions of dollars. Chinese elite are buying off U.S companies and US houses in New York, California and across US. President of China a Made in China 2025 plan, they call it a win-win situation. In my case, it means China wins either way, if they lend you $1.5 billion and manage to pay back with the interest, China wins, and if you don’t manage to pay back, China takes back the national assets, so China still wins.
What do you do when you are bleeding debts and on the verge of bankruptcy? You move back into your parents basement of cause or if you’re a country, you ask China for help, that’s exactly what Greece is doing. The problem 99% of the times you make choices when you are desperate, are never wise choices.
These rich and developed countries stop lending you money when you don’ do what they say. US wants you to legalize gays in your country or else, no more support. That is total BS, China doesn’t care about those stuff, China doesn’t care if your country has human rights or not or whether your citizens do the freaky-freaky ;). The EU was refusing to lend Greece money to bail them out, so they left and while they were leaving China moved in and helped, now the same EU write articles saying Chinese is trapping Africans with debts why are they overlooking all the ports and national assets Chinese state owned companies have been buying in Europe for the past 10 years? Just 24 days after taking office, the Greece PM welcomed a Chinese Warship to the Greek port of Piraeus. In 2016 Greece allowed a Chinese stated owned company Cosco to buy 51 pct of share in Piraeus port $331 million. In December 2016, China bought a 24 pct stake in Greece’s public power grid operator, Public Power Corp.(PPC) and while Greece PM was in Beijing in 2017, he signed an agreement with a Chinese company Forthnet to invest $546 million over 7 years to build a fiber optic telecommunications network in Greece. So you tell me it’s even right to say “China is taking over Zambia/Africa” or “China is taking over the World”?
Did you have to insult before sharing your views?
But this article was only specifically talking about Africa. That doesn’t mean it’s not happening anywhere else. Calm down!!! Sheesh 😳
That’s exactly the situation, summed up perfectly! World leaders have sold the soul of their respective countries to the devil!!
He’s right, the whole western world has been stupid. We have bought products from a non-democratic country – goods that are cheap due to what is close to slave labor – rather than buying from countries with laws such as democrats expect. We have allowed Chinese in on flimsy excuses to form voting blocks for the last election each country will have. So greed for buying for the least money has been our undoing.
Perhaps this situation in Africa( and the rest of the world) , wouldn’t have happened if the leaders weren’t so corrupt. The corruption, deceit, theft, nepotism, laziness etc is rampant. How much money has been lost through crime and corruption. Just bring the Gupta family to court, and get them to pay back their billions they stole from South Africa.
No one said it was only Africa ass hat, read the f#kn article and calm down.
China will and is starting from low economical countries in Africa and they are also intervevning in Pakistan as well
A step towards Hegemony.
An under develop world should aware of it and yhis is a red signal for all the countries.
China is dominting these countries culturally, economically, and politically.
Why doesn’t the ‘educated’ ministers not take note of this? Oh, they are enriching themselves at the expense of the voters and people of these countries they are ruining 😒 We need to make a stand as we are losing our continent to unscrupulous countries who are out to benefit from the minerals and riches we possess. Shame on our leaders!!!
For further (dramatised) reading on the subject try ‘Plunderland’ by Mark Newham, a long serving journalist who went to great lengths to get the inside track on China’s propaganda machine.
It seems as if Africa let everybody make fools of them. It’s a damn shame they are gonna let those people take over their country. Why don’t they go to the other African countries and try to pay off the debt and get them the F out of Africa?
Lease the land and assets for profit, and start your own businesses. Do not let anyone else own your legacy.
This has been coming for years. I have been telling my African students since 1998 that there is no need to depend on outsiders as Africa is blessed with all sorts of resources. The Chinese ‘invasion’ is inevitable due to personal interest taking precedence over national interest. Time to think again on receiving foreign monies. Attempts must be made URGENTLY to retrieve and take control of your affairs. God bless Africa.
An era of weak leaders. China is initiating another round of colonisation of Africa when Africa has not recover from the European one. This is lightning striking twice for Africa. Where’s AU?Gaddafi was mowed down in cold blood AU was mute. Zambian assets were taken over by china and its sovereignty under threat, AU was indifferent. Oh who will speak for Africa and give it protection before China swallowed it up country by country. Please let us all inundate AU with mails urging it to speak up for us and stop its sickening docility quick. The misery and disgrace of European colinialism and its neocolonialism is too humiliating to be repeated.
All of you make it sound like a bad thing, the Chinese masters are coming home and hopefully it would mean an end to corrupt and useless leadership in African countries. Although Trump has been giving them a run for their money with his blatant abuse of power.
Weak and greedy African leaders must be jailed for their greed. I don’t know why people think they should run a country with brainless heads
Until African leaders find a moral compass this will continue until the Chinese own as much as they want. African leaders are not worried in the least about their citizens, only their image, power and money. They will sell their sole without batting an eyelid. The ordinary folk in Africa will soon be praying for their old colonialists to return and save them from the Chinese – some already are.
Why the leaders dont offset the Covid 19 shutdown and medical costs against their loans is beyond me – oh I forget they want more money, power and glitter.
Africa has had this coming for decades! It’s a continent notorious for one-party states, long lived military regimes, civil war and economic mismanagement! Zimbabwe has proved to be THE prime example, in more recent times, and there’s not even a glimmer of hope for positive change there. I can still vividly remember one African-American businessman’s comment on leaving Zimbabwe, after what was obviously a failed attempt to invest there. His exact words to a reporter, before he boarded his flight? “Thank God for slavery”. That comment was made more than 20 years ago! Not a helluva lot has changed for the better since then either.
Africa is under siege by their own leaders who let the cunning dragon,disguised in sheep’s clothing into their countries heart of their economies. If you take a look at China’s economic enslavement approach, you will see that they strategically capture ports of entry all around the coast of Africa. By 2030 Africa will probably be entrapped and surrounded by Chinese military bases at strategic sea ports. From there on its gonna be African puppet leaders serving the red and furious dragon to the detriment of their own people. If look at the consequences befalling African nations for not honouring their debt, then it is clear that there is no such a thing as free ride on the dragon’s back. Many leaders confuse the dragon’s tail with it’s back. Most if not all African countries operates on some kind of “democratic” goverment system, but the irony when engaging China on loan agreements, is the secrecy and undisclosed critical details that’s been kept away from their people. If I’m not mistaken, but soon the hatred for the “colonizing west” will soon be directed towards the red dragon with grave consequences. The ” peculiar loud silence” of the African Union on this matter is by all means no mystery. By the way… They had their head quarters compromised for many years. Now is the time for African leaders to unite and set the record straight with regards to the sovereignty of Africa. There is still hope for Africa… don’t let foreign nations control the terms of agreements. Root out corruption and hold the corrupt accountable in full public view and scrutiny. Break alliances with those foreign powers who wants to enslave the African continent. China needs Africa. We are not reliant nor are we in need of China or any other nation for that matter. Africa as a continent can be self sustainable. Wake up African Union!!!!
Dont worry too much.
The 3rd world war will sort things out.
Russia, China and Turkey join forces and the war starts in the Balkans.
The US and UK are wiped out.
The Germans become the world power taking Russia and China out of the picture.
The Germans are going to come into South Africa with the intention of taking Namibia back as SWA and Zimbabwe and Zambia becoming part of South Africa again.
SO DONT STRESS ABOUT THE CHINESE..
This has always been China’s plan and they have known from the start that the loans they were making would never be repaid. Given that the US is printing money like crazy these days, I’m thinking that we should buy/pay-off those loans and build a little credibility on the continent. $50,000,0000,000 for Zambian loans – a pittance compared to what is being thrown around these days and with probably far more lasting benefits.
The Australian state of Victoria, led by an idiotic Daniel Andrews is falling into the same trap.
Ha ha ha ha , then we need to get contracts to feed and clothe Chinese cities in Africa that will a good business.
It’s hard for Africa.Nonetheless even under IMF and world Bank, Africa remained undeveloped.When the Chinese came on the scene the west has come out complaining loudly. I believe Africa has become the new playground as both the West and China engage in their supremacy wars.
Citizens need education
Columnist at https://www.propscout.co.ke/
This is a sad state of affairs for Africa
Every body is crying over European colonialism, but when China gets their claws hooked right, they will all be begging for the Europeans to return.
I wouldn’t want to allege that this serves them right because it is warning and a wake-up call to other African countries. However, i would advice African leaders to go into partnerships and resource explorations with this third world developed economy rather than dragging the local economy into destitution and jeopardy.