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Like many senior U.S. officials who have visited Africa, Treasury Secretary Janet Yellen blamed China for the African debt problem during a recent visit to Africa. But this is a distraction.
WHO HOLDS MOST AFRICAN DEBT?
According to the World Bank’s International Debt Statistics, multilateral financial institutions and commercial creditors hold nearly three-quarters of Africa’s total external debt.
A report published last July by the British NGO Debt Justice showed that 12 percent of the external debt of African countries is owed to Chinese lenders, compared to 35 percent to Western private lenders. The average interest rate of these private loans is 5 percent, compared with 2.7 percent for loans from Chinese public and private lenders.
According to figures released by Zambia’s Ministry of Finance and Planning, multilateral financial institutions account for 24 percent of the country’s foreign debt, while predominantly Western commercial lenders account for 46 percent.
China is not responsible for African debt distress
Bereket Sisay is a commentator of international affairs, with a special focus on Africa.”China is not responsible for African debt distress”, he said.
He said Africa has long been engulfed by infrastructural development gaps, which have had a negative impact on its economic and social structures as well as its large population.
It is an obvious fact that many African countries are deficient in financial capacity to build all these infrastructural projects and transform the status quo.
As a result, the fundamental socio-political reality that has solely pushed the continent to seek loans from China was not created by any political factor, nor does China mandate that states be enticed to accept these loans.
Chinese development assistance follows a casual business practice that prefers a recipient-driven model determined by bilateral deals.
Furthermore, Chinese loans to Africa are primarily low-interest rates with a longer maturity period and no strings attached, which is in sharp contrast to multilateral financial institutions that have experienced low demand rates.
The so-called African “debt-trap” has long been touted by both Democrats and Republicans, and more importantly, it has been further advanced by value-laden U.S. corporations and agencies, including media outlets.
Bereket Sisay said, no African countries are complaining about any forms of “debt-trap;” rather, the agenda is now being exported and more pronounced by outsiders.
This clearly implies that the term “debt-trap” is a fairy tale and an obscuring description of China’s relationship with Africa, intended to reverse the gains of this mutually beneficial partnership.
However, there is not an ounce of truth regarding the narration; everything is destined to be nullified.
“Debt-trap” is an organized campaign and diplomatic containment strategy aimed at preventing Chinese economic and political influence in Africa.
TBereket Sisay said, Yellen’s trip to Africa, particularly to Zambia, goes beyond stated objectives and is slanted towards discrediting China’s development financing assistance to African countries.
Online Reporter