Public Management

East African countries’ debt towards China has grown considerably in the past ten years to reach $29.4 billion

Monday, 15 October 2018 17:55

In the past ten years, East African countries borrowed $29.4 billion from China to develop their transport, communication, manufacturing and energy sectors.

Indeed, according to data from the China Africa Research Initiative (CARI) of Johns Hopkins University, Ethiopia which received the largest loan during that period, owes $13.73 billion, $9.8 billion for Kenya, $2.96 billion for Uganda and $2.34 billion for Tanzania. Rwanda, South Sudan, and Burundi owe $289 million, $182 million and $99 million respectively.

These governments consecrate about 8% of their revenues to repay the loans. This constitutes a burden on their economies since according to analysts, the impact of those loans on economic growth has not been demonstrated yet.

In that regard, Deborah Brautigam, director of CARI, explains that instead of seeing those loans as an opportunity, it is important to assess whether the projects covered by them will generate enough economic activities for repayment. She added that the risk for African countries is related to the profitability of those projects.

It is also worth mentioning that despite this debt burden, Africa still sees China as the best funding partner but some experts estimate that China has been playing a bad game by indebting the continent.

Opinions qualified as being misleading by Xu Jinghu, Chinese Government's Special Representative for African Affairs, who estimates that data proves that the continent owes more funds to private backers than to China.

"It is baseless to shift the blame onto China for these African countries debt problems. Their debt position has ‘been built over time even before we came in, […] We have to look at the fluctuations in the international economic situation vis-a-vis the price of minerals, their key exports. This is where the problem is, and not Chinese loans", the representative said. 
Flore Kacou

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