Over the past two decades, China has emerged as the biggest bilateral lender to Africa, transferring nearly $150 billion to governments and state-owned companies as it sought to secure commodity supplies and develop its global network of infrastructure projects, the Belt and Road Initiative, reported the Financial Times.
China’s share of bilateral debt owed by the world’s poorest countries to members of the G20 has risen from 45% in 2015 to 63% last year, according to the World Bank. For many countries in sub-Saharan Africa, China’s share of bilateral debt is larger still.
Chinese lenders have lent money to almost every country on the continent and eight have borrowed more than $5 billion apiece this century. But Beijing’s involvement in a Debt Service Suspension Initiative (DSSI) from the G20 group of the world’s largest economies has been slow, said the FT.
“It’s frustrating,” said David Malpass, president of the World Bank, this month. “Some of the biggest creditors from China are still not participating and that creates a major drain on the poorest countries . . . if you look at the [Chinese] contracts, in many cases they have high interest rates and very little transparency.”