China ‘not to blame’ for African debt crisis, it’s the West: study
- High-interest loans from private Western lenders account for most of the burden on countries in Africa, Britain’s Debt Justice charity finds
- Campaigners are calling on the G7 to stop using Chinese loans as ‘distraction’ while letting their own banks, asset managers and oil traders off the hook
This is despite the growing accusations by the US and other Western countries that China’s lending is behind the debt troubles faced by some African countries.
The study said just 12 per cent of the continent’s external debt was owed to Chinese lenders, compared to 35 per cent owed to Western private creditors, according to calculations based on World Bank data.
Interest rates charged on private loans were almost double those on Chinese loans, while the most indebted countries were less likely to have their debt dominated by China, the study found. The average interest rate on private sector loans is 5 per cent, compared to 2.7 per cent on loans from Chinese public and private lenders.
The study found a dozen of the 22 African countries with the highest debts were paying more than 30 per cent of their total external repayments to private lenders. These included Cabo Verde, Chad, Egypt, Gabon, Malawi, Morocco, Rwanda, Senegal, Tunisia and Zambia.
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South Sudan is one of the hardest hit in this category, with 81 per cent of its debt repayments going to private creditors, and just 11 per cent to China. Ghana is also paying more than half of its external debt obligations to the private sector, with 11 per cent going to China and the rest to multilateral lenders and other governments.