Several African countries are attempting to restructure their debt with China in the run-up to the important Forum on China-Africa Cooperation in Beijing next month, but most African leaders still see China as the best source of funding for their development needs, Reuters reports.
Ethiopia and Zambia, two of the largest African borrowers, have both expressed their wish to restructure their Chinese debt, and Angola and Congo Republic may already have done so, according to Reuters.
China lent $125 billion to Africa between 2000 and 2016, and many African nations have seen their debt levels rise significantly in recent years, prompting worries that some will fall into a debt crisis. The International Monetary Fund has said that Cameroon, Ghana, Djibouti and several other countries are all at a high risk of debt distress.
Despite these issues, African countries mainly recognize that borrowing to build infrastructure is essential to their economic development and view China as preferable to the long and troublesome process of seeking funds from global multilateral lenders, or the higher commercial rates offered by Western banks.
Aboubakar Omar Hadi, chairman of the Djibouti Ports and Free Zones Authority, told Reuters that Djibouti had to borrow $268 million from seven banks at 9% over nine years to fund its Doral Container Terminal, while its first Chinese loan was $620 million over 20 years at 2.85%.
“Especially when you go to multilaterals, it takes such a long time,” Hadi said. “Where is America? Where is the investment from Europe? We are ready. Why are they leaving the whole continent for China? They have themselves to blame if here they are out of the game.”