NEW DELHI: China has made “a solid contribution to economic development” in the African continent, but we need to be equally candid about the whole question of debt,” says Dr Witney W. Schneidman, Former U.S. Deputy Assistant Secretary of State for African affairs. He points to one example of Zambia “skipping its ($42.5 million) coupon payment to bondholders in Europe with China holding the most significant portion of the country’s debt.” Zambia is the first African country to default on its debts since the pandemic. The Institute of International Finance has warned of a ‘debt tsunami’ as global indebtedness hit $277 trillion in the third quarter of 2020 and there are growing demands for more transparency in Zambia’s estimated $3 billion debt to China.
“Why can’t the people of these countries see the contracts? Why can’t the international community see those contracts? What’s the commercial viability of some of these projects?,” the senior international advisor for Africa at Covington & Burling LLP asks. Dr Schneidman who works with ‘international and African companies to mitigate risk, resolve disputes and help companies align their commercial objectives with the economic development objectives of African countries’ says, “transparency is the only way to go.”
“It strikes fear in the heart of everyone to think that if the Kenyan government were to not honour its financial obligations to China, they would have to hand over the port of Mombasa,” the non-resident fellow at Brookings Global tells StratNews Global Associate Editor Amitabh P. Revi. He says “India’s stepped up engagement in Africa is very encouraging,” adding it has a “tremendous asset and resource” of “so many people of Indian descent who’re part of the fabric of African life” that it can build on and share with the continent including its “agricultural revolution and technological powers.”
Editor’s note: This interview was recorded before the November 22, 2020 G20 Summit endorsed a plan to extend a debt servicing moratorium for developing countries by six months to mid-2021.
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