According to the China-Africa Research Initiative, 50 of Africa's 54 countries received loans worth USD 153.4 billion from Chinese organizations between 2009 and 2019. China's influence on African countries has been the subject of much debate and research in recent years, with China's engagement increasing significantly over the last two decades, with the Chinese government and Chinese companies playing active roles in a variety of areas across the continent.
China routinely contributes funds to the development of various infrastructure projects, such as roads, trains, dams, ports, and airports. In some cases, Chinese state-owned firms build major infrastructure systems in African countries, generally in exchange for mineral resources or hydrocarbons such as oil.
This article will provide a brief overview of several African countries influenced by China.
Uganda
China's influence in Uganda, including the acquisition of an airport, is a subject that needs to be thoroughly investigated. China has been involved in a number of infrastructure projects in Uganda, providing loans and investment to help support the construction of roads, trains, and airports.
Recently, the Ugandan government's failure to repay a loan resulted in the Chinese lender, Export-Import Bank of China, also known as Exim Bank, assuming control of various assets in the country, including the prominent Entebbe International Airport, which serves over 1.9 million passengers per year.
China's growing involvement in Uganda and throughout Africa has sparked interest and discussion. Critics believe that Chinese funding could come with political stipulations. China owns over 20% of Uganda's debt, or approximately $1.6 billion.
Ghana
The International Monetary Fund (IMF) recently stated that Ghana's four collateralized loans from China may put the government at danger of losing future energy sales as well as a percentage of mineral resource earnings. Ghana has relied on Chinese loans as a continuous source of money for large-scale projects over the last two decades, with Accra amassing about $5 billion from at least 41 Chinese loans.
However, Ghana is currently in debt and suffering its worst economic crisis in a generation. Due to several years of largely unrestricted borrowing, the country's external debt portfolio now surpasses $30 billion.
In light of this, Ghana's reliance on Chinese loans has clearly had both beneficial and negative implications. On the one hand, these loans have aided in the financing of critical infrastructure projects, which have promoted economic growth. They have, on the other hand, contributed to Ghana's current debt dilemma.This raises the possibility of thoroughly weighing the risks and rewards of Chinese loans before entering into new contracts.
Nigeria
According to a new study, Nigeria's debt to China has risen from $1.39 billion in 2015 to $4.29 billion in 2022, a 209% increase in just eight years. According to data from the Debt Management Office (DMO), China loans account for 84.73 percent of Nigeria's bilateral debt.
Due to low revenue and escalating interest payments, Africa's largest economy has essentially no money after paying debt interest. The impact of China's influence in Nigeria is complex, and with the country's constant borrowing, there is room for agreement on how this influence, which is anticipated to grow in the coming years, is detrimental to Nigeria and Africa as a whole.
Angola
Angola, as an African country, provides an example of how it, like other African governments, limits the impact of China in its sphere. Angola is a major oil producer and exporter, with China being one of its most important consumers. Angola was the fifth-largest supplier of oil to China in 2020.
China has made oil-backed loans to Angola as part of its financial assistance to the country. These loans are guaranteed to be repaid with earnings from Angola's state-owned oil business, Sonangol. The oil-backed loans have aided Angola's infrastructural and economic development. They have, however, expressed concerns about debt sustainability and the possibility of China gaining control of Angola's oil resources.
The partnership has altered dramatically since it was formed in the early 2000s, as the new Angolan model has discovered ways to avoid Chinese debt traps.
South Africa
South Africa currently owes China an estimated 4% of its annual GDP. China provided the government with numerous loans, some of which have been heavily criticized. Despite South Africa's leadership in innovative technologies such as deep-well mining, among others, the country fell short of the US$14.7 billion pledged by China for infrastructure projects.
The looming worries about the prospect of a Chinese debt trap in Ghana and the rest of Africa.
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