In less than ten years China has successfully colonised Africa without firing a single bullet.
Until 2010, China’s hold over Africa was mute but all that changed in 2012 when Beijing Conference quietly took place and since then China has become the sheriff in town and Africa has effectively become a de facto Chinese province.
Since 2010 China has pledged over $100 billion to develop commercial projects in Africa and since the Asian country’s financial colonisation of Africa has only accelerated.
“China and Africa can forge a stronger comprehensive and strategic partnership. China promises to engage with Africa on a principle of sincerity and real results,” said President Xi.
According to a study by the China-Africa Research Initiative at the Johns Hopkins School of Advanced International Studies, China had lent a total of $143 billion to 56 African nations facilitated principally by the Export-Import Bank of China and the China Development Bank.
By sector, close to a third of loans were directed toward financing transport projects, a quarter toward power and 15% earmarked for resource mining including hydrocarbon extraction. Just 1.6% of Chinese loans were dedicated to the education, healthcare, environment, food and humanitarian sectors combined, confirming that all China interested in was building a giant commodity/trade/military hub.
Just seven countries – the strategically important Angola, Cameroon, Ethiopia, Kenya, Republic of the Congo, Sudan and Zambia – accounted for two-thirds of total cumulative borrowing in 2017 from China, with oil-rich Angola alone representing a 30% share, or $43 billion (35% of Angolan 2017 GDP).
According to an April 2018 IMF study, as of the end of 2017, about 40% of low-income Sub-Saharan African countries are now in debt distress or assessed as being at high risk of debt distress including Ethiopia, the Republic of the Congo and Zambia.
On September 3, a report by British business intelligence outlet Africa Confidential titled Bills, Bonds and even Bigger Debts, warned of Zambia's escalating debt caused by allegedly unsustainable Chinese loans and claimed that Zesco, the state-owned national electricity company, has been in talks about a takeover by a Chinese company.
Zambia’s presidential spokesman Amos Chanda has since denied the report.
Kenya, East Africa's biggest economy is also at risk of being compromised due to its souring Chinese debts.
The country is among the highest indebted countries in Africa. According to China Africa Research Initiative, Kenya is ranked as the third most indebted country to China in Africa in the period between 2000 to 2017.
Kenya’s borrowing from China stood at Sh980 billion as at the end of 2017.
Djibouti is also projected to take on public debt worth around 88 per cent of the country’s overall $1.72 billion GDP, with China owning the lion’s share of it, according to a report published in March by the Center for Global Development.
Angola too reached a loans-for-oil settlement, with Beijing effectively tying the country's future oil production to shipments to China in order to service the country's burgeoning infrastructure debt.
So do African countries have cause to worry? if past tactics China has employed to recoup its money especially in Sri Lanka is anything to go by then African countries have a big reason to be very worried.
Sri Lanka racked up more than $8 billion worth of debt to Chinese sovereign-backed banks at interest rates as high as 7 percent reaching a level too high to service. With nearly all its revenue going toward debt repayment, in 2017 after being pushed to the wall, Sri Lanka threw in the towel and handed over the Chinese-built port at Hambantota under a 99-year lease with China having a 70 percent stake.
In all this growing African Chinese debts what compounds the problem even further is the secrecy behind it. African heads of states continue to deny the severity of the problem but continue to sign multi-billion infrastructure deals with China while keeping the public clueless. Seasoned economists and international financial institutions paint a grim picture of Africa's souring debts.
It seems the youngest continent in the world has quickly forgotten its long bloody history to gain independence and has opted to jump out of the frying pan into the fire.
