Africa has a question for Beijing: will you forgive us our debt?
- Chinese state banks have poured billions into the continent as part of the controversial belt and road infrastructure scheme
- But it is unclear how Beijing will respond to calls for debt relief amid the economic fallout from the Covid-19 pandemic
Angola, Zambia, Sudan and the Republic of Congo (Brazzaville) are among those seeking relief, arguing they need to reallocate funds to health care and equipping hospitals to fight the coronavirus, which has infected over 3.5 million people worldwide. Africa was largely spared in the early days of the outbreak, but cases as of Sunday had jumped to more than 44,000 and 1,771 dead.
Yun Sun, a fellow with the Africa Growth Initiative at the Brookings Institution in Washington, said Beijing was unlikely to take a unilateral approach to debt forgiveness.
“Rather than outright relief, postponement of loan payments, debt restructuring, and debt/equity swap are more likely in China’s playbook,” said Sun, who is also co-director of the East Asia programme and director of the China programme at the Stimson Centre. She said the most likely loans to be forgiven would be zero-interest ones.
As the virus itself starts to spread further on the continent, the economic havoc it has caused elsewhere in the world has already hammered African economies.