With economic conditions across Africa rapidly deteriorating, leaders across the continent are escalating their calls for the international community to provide emergency debt relief. Until this week, though, those appeals have been broadly targeted, not singling out any particular country or creditor.
But that changed on Monday when Ghanaian Finance Minister Ken Ofori-Atta specifically named China. “African debt to China is $145 billion or so, over $8 billion of payments is required this year,” he said during an online video discussion with the Washington, D.C.-based think tank the Center for Global Development. “So that needs to be looked at,” he added.
The following day, Ofori-Atta’s comments were raised at the Chinese Foreign Ministry’s regular press briefing in Beijing where spokesman Zhao Lijian said discussions are now underway with African governments.
So now the more pressing question is what will Chinese debt relief in Africa look like? Anti-debt campaigners like the Jubilee Debt Campaign and certainly some African governments are advocating for Beijing to cancel the debt in Africa. Experts, though, say if China’s past record is anything to go by, then that is highly unlikely.
Agatha Kratz, associate director at the New York-based independent research firm Rhodium Group and her colleague Matthew Mingey, a research analyst there, closely follow Chinese lending practices around the world, including in Africa. Both are confident that China will likely enact some form of debt relief for the continent but, like everyone else, they’re are unclear as to how far the Chinese plan to go.
Agatha and Matthew join Eric & Cobus to discuss the debt crisis in Africa and possible scenarios for how the Chinese may respond.
- Rhodium Group: New Data on the “Debt Trap” Question by Agatha Kratz, Allen Feng, and Logan Wright
- South China Morning Post: China asked to write off more African debts as coronavirus hits economies by Jevans Nyabiage
- Sydney Morning Herald: China open to talks with poor countries on coronavirus debt challenges: official by Andrea Shalal
About Agatha Kratz and Matthew Mingey:
Agatha Kratz is an Associate Director at Rhodium Group. Agatha coordinates Rhodium Group’s European activities and leads research on European Union-China relations and China’s commercial diplomacy. She contributes to Rhodium work on China’s global investment, industrial policy and technology aspirations. Agatha is a non-resident Adjunct Fellow of the Reconnecting Asia Project at the Center for Strategic and International Studies under the Simon Chair in Political Economy.
She holds a Ph.D. from King’s College London, on China’s railway diplomacy. Her previous positions included Associate Policy Fellow at the European Council on Foreign Relations and Editor-in-Chief of its quarterly journal China Analysis, Assistant Editor for China Economic Quarterly, and Junior Fellow at Asia Centre in Paris. Agatha has a Bachelor’s degree in Political Science and a Masters in Finance from SciencesPo Paris, as well as a Masters in Public Administration from the London School of Economics and Columbia University School of International and Public Affairs.
Matthew Mingey is a Research Analyst with Rhodium Group’s China Macro & Policy team. Based in New York, Matthew focuses on China’s economic diplomacy and outward investment, including development finance. Previously, he worked on global governance issues at the World Bank. Matthew received a Master’s degree in Global Business and Finance from Georgetown University’s Walsh School of Foreign Service and a Bachelor’s degree from the University of Pennsylvania.