The problem of foreign debt has been a major and persistent set back for the African economy; despite being one of the fastest growing economies in the entire globe. This is mainly as a result of the fact that most African countries in debt are still underdeveloped and therefore depend on foreign loans to sustain their economies. As the domestic resources in these countries are limited to meet these needs, countries often have to borrow and continuously accumulate debt and the level of debts which stems from these countries’ continuous borrowing has continued to rise unabated. Consequently, governments in low-income countries often face considerable economic deficits, given their high levels of indebtedness in relation to GDP and to export receipts.
It is important to point out that the debt we are referring to in this context is the one we call foreign or external debt which is the total debt owed by both public and private bodies to nonresidents of a country, payable in an internationally accepted foreign currency, goods or services. You may have heard about this issue of foreign debt but you may not know how bad it is. See the 10 African countries with the highest external debts and know if your country made the blacklist; that is, if you’re African.
“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,” China’ s special envoy to Africa, Xu Jinghu, said last month denying claims that Beijing was burdening Africa with debt.
For CARI director Deborah Brautigam, “It is always important to look at whether these projects will generate enough economic activity to repay these loans, as opposed to being seen as merely ribbon-cutting opportunities.”
Here are the top 10 African borrowers from China and how much was loaned to them since the year 2000.
1. Angola – $42.8 billion
2. Ethiopia – $13.7 billion
3. Kenya – $9.8 billion
4. Republic of Congo – $7.4 billion
5. Sudan – $6.5 billion
6. Zambia – $6.4 billion
7. Cameroon – $5.5 billion
8. Nigeria – $4.8 billion
9. South Africa – $3.8 billion
10. Ghana – $3.5 billion