Rajpriya Gautam

Leaders from several of Africa’s largest countries including  South Africa ,  Kenya , and  Ethiopia  renewed their urgent appeals on Tuesday for debt relief, debt cancellation, and immediate financial assistance from the international community to help support economies across the continent amid the increasingly dire economic crisis. What’s notable about the latest pleas from South African President Cyril Ramaphosa, Kenyan President Uhuru Kenyatta and Ethiopian Prime Minister Abiy Ahmed is how familiar they are. Since March, when the pandemic worsened in Africa, these and other African leaders have repeatedly issued similar appeals, all to little or no effect. Here’s a summary of their requests: Extend the G20’s Debt Service Suspension Initiative through 2021. Provide an immediate cash injection of between $100-$150 billion to assist African economies facing liquidity challenges. Issue new IMF Special Drawing Rights that would provide additional capital to the world’s poorest cou

A video  of an unnamed Tanzanian official mocking Kenya  for borrowing so much money from China to build the Standard Gauge Railway went viral in East Africa this week. “I do not want to mention the country but it built a railway line using loans. The country is not far from here; they have built it on loans and after completion, it will take more than 25 years to fully repay back the money,” said the official at a press conference. “The cost of the railway of the neighboring country, the cost of the line is thrice the cost we are building ours in Tanzania under our President John Pombe Magufuli,” he said.  The official’s comment is a bit odd, though, because his own government  announced in February that it will borrow $1.46 billion  from Standard Chartered Bank to build its own Standard Gauge Railway. Nonetheless, retweets of the video multiplied quickly, with many Kenyans agreeing with the official’s sentiments that Kenya had paid too much for its railway and is now stuck with a

President Ali Mohamed Shein  inaugured Zanzibar’s new $129 million international terminal III, which was Chinese-funded and built . The hope is that this new facility will spur tourism that will generate the funds to repay the loans. Completion of the new terminal also highlights how the ongoing pandemic does not appear to be having a significant impact on the ability of Chinese contractors in Africa to complete their projects. This was also evident earlier this month when the China State Engineering Corporation completed  the new Lagos to Ibadan standard gauge railway . Get a daily email packed with the latest China-Africa news and analysis. Read exclusive insights on the key trends shaping China-Africa relations. Connect with leading professionals on the China- Africa Experts Network. You've reached your free monthly article limit. Subscribe today for unlimited access. SUBSCRIBE: $15 per month SUBSCRIBE: $149 per year -17% Savings The post Zanzibar Ope

In the wake of Zambia’s default on a portion of its private creditor debt and the subsequent downgrade by international credit ratings agencies, investors are scanning the map to see which country will tumble next. According to the global ratings agency Moody’s Investors Services, Mozambique is a probable candidate. Moody’s warned in its annual report for Mozambique  that the country’s debt will likely exceed 100% of GDP and “the government’s low willingness to prioritize debt payments,” make it a prime candidate to default on some of its upcoming repayments. Mozambique’s  total debt as of 2019  was around $14.78 billion. Although bilateral loans account for the largest share of their debt, very little of that is coming from China. From 2000-2018,  according to the China-Africa Research Initiative , China lent just $2.4 billion to Mozambique, mostly for transportation infrastructure development. Get a daily email packed with the latest China-Africa news and analysis. Read exc

If you haven’t been able to sit in on the China-Africa Research Initiative’s ongoing annual conference, the discussions are now available to view online.  This year’s conference focuses on China-Africa security relations and features a number of prominent scholars and analysts from the United States, Europe, China and various African countries. Three Sessions From the Annual CARI Conference: CHINA’S CHANGING ROLE IN AFRICAN SECURITY  moderated by  Chris Alden , Professor of International Relations, London School of Economics. Panelists: Abiodun Alao , Professor of African Studies, African Leadership Centre, School of Global Affairs, King’s College London Zhang Chun , Professor, Institute of International Relations, Center for African Studies, Yunnan University SECURITY ENGAGEMENT, MILITARY EXPORTS & ARMS SALES  moderated by  Phillip Saunders , Director, Center for the Study of Chinese Military Affairs, Institute for National Strategic Studies, National Defense Universit

One of the world’s major credit ratings agencies, Fitch Ratings, issued an ominous warning that last week’s downgrade of Zambia’s will likely not be the last in Sub-Saharan Africa.  In an article published on its website yesterday , the agency highlighted Angola, the Republic of Congo, Gabon, and Mozambique as candidates for further downgrades, because they “face acute liquidity pressures and very high debt levels.” All four countries have already been downgraded by Fitch this year. While Fitch appears to be most worried about debt sustainability in these four African countries, the ratings agency did not identify Chinese debt as a point of concern, particularly related to Angola and the Republic of Congo, where Chinese debt levels are higher than in most other African countries. Instead, Fitch focused on the challenge presented by private creditors, specifically Eurobond holders, and the mounting pressure that governments now feel to meet their repayment obligations. Key Highlight

The Sudanese government is being pulled in opposite directions by the United States and China over potentially volatile political issues related to Israel and Xinjiang. In its efforts to move more North African and Arab countries to recognize Israel, the United States is trying to coordinate a financial package that would help persuade the government to open ties with the Jewish state. Talks broke down though over the amount of money offered. The Sudanese rejected an $800 million offer and said that they’re expecting 3-4 times as much. Similarly, the transitional government in Khartoum is maintaining a low profile on the contentious issue of China’s internment of more than a million Uighur Muslims in its far western Xinjiang region. “Many Islamic countries cannot lose an economic partner such as China, therefore, they choose to turn a blind eye to reports by human rights organizations, which hold the Chinese government directly responsible for what happens to minorities there,” said

After he scored his 50th goal on Monday,  Congolese forward Cédric Bakambu  became the all-time scoring leader for Beijing Guoan in the Chinese Super League. The Chinese embassy in Kinshasa noted the achievement on Twitter. Avec le 11ème but de la saison, Cédric Bakambu @Bakambu17 est devenu ce lundi le meilleur buteur dans l’histoire de Beijing Guoan avec 50 buts. Depuis son arrivée en Chine, il est impliqué sur 69 buts en 69 matchs ! Bravo ! pic.twitter.com/7uHasvMWGb — Ambassade de Chine en RDC中国驻刚果（金）大使馆 (@AmbCHINEenRDC) September 28, 2020 Although Bakambu was born in France, he played for the DRC’s national team and, as such, is closely followed by fans in the Congo. He’s a veteran of both the French premier league Ligue 1 and Spain’s La Liga. He’s been at Beijing Guoan since 2017. Get a daily email packed with the latest China-Africa news and analysis. Read exclusive insights on the key trends shaping China-Africa relations. Connect with leading professionals

Debt relief for developing countries is emerging as the latest front in China’s rapidly escalating confrontation with the U.S, European countries, and Japan. Finance ministers from many of those countries, representing the Group of 7 (G7),  met on Friday to discuss debt relief initiatives  for the world’s poorest countries, including many in Africa. In a sharply-worded joint statement  issued after the meeting, the finance ministers singled out China for failing to do more to support the Group of 20’s Debt Service Suspension Initiative and for Beijing’s lack of transparency in its debt relief talks. Although the statement did not mention China by name, the finance ministers used thinly veiled language to make clear they were referring to Beijing: DEBT CLASSIFICATION:  “We strongly regret the decision by  some countries  to classify large  state-owned, government-controlled financial institutions  as commercial lenders and not as official bilateral creditors, without providing compa

When the G20 says it has provided $14 billion of “estimated total immediate liquidity provided by official bilateral creditors in 2020 alone,” consider that amount is spread across all regions around the world. It falls far short of  calls by Ethiopian Prime Minister Abiy Ahmed and other African leaders for the G-20 to provide $100-$150 billion in emergency funding. Get a daily email packed with the latest China-Africa news and analysis. Read exclusive insights on the key trends shaping China-Africa relations. Connect with leading professionals on the China- Africa Experts Network. You've reached your free monthly article limit. Subscribe today for unlimited access. SUBSCRIBE: $15 per month SUBSCRIBE: $149 per year -17% Savings The post Here’s What the G20 Says DSSI Has Accomplished So Far appeared first on The China Africa Project . source https://chinaafricaproject.com/2020/09/28/heres-what-the-g20-says-dssi-has-accomplished-so-far/?utm_source=rss&a

Zambia’s financial situation is rapidly deteriorating following last week’s announcement by the government that it would default on $3 billion of Eurobond debt. Soon after, the credit ratings agency  Fitch downgraded Zambia’s foreign-currency bonds , immediately increasing the cost of borrowing for Lusaka. Investors weren’t encouraged by  Friday’s unveiling of the 2021 annual budget by Finance Minister Bwalya Ng’andu  where he forecast yet another increase in the country’s budget deficit but didn’t elaborate debt restructuring plans. Since China  owns around 44% of Zambia’s $11.1 billion of external debt , attention is now turning to see if Beijing will negotiate a loan restructuring settlement similar to  what it reportedly did in Angola last week .  Chinese officials are characteristically quiet as to the current state of debt relief talks with Zambia. SUGGESTED READING: Jeune Afrique:  Zambia’s call for debt relief triggers fear of domino effect across Africa Bloomberg:  Zamb

The Chinese-financed and built Standard Gauge Railway is losing money at an unsustainable rate of  $9.2 million per month  prompting renewed calls in parliament for the State House to renegotiate the  $3.2 billion of loans used to construct the Nairobi to Mombasa line . Earlier this year, Kenya Railways defaulted on a $370 million payment to the China Road and Bridge Corporation subsidiary that runs the railway and based on the  findings of a new parliamentary report  submitted last week, it looks increasingly likely that KR will not be able to meet future obligations as well. Although  critics contend that the SGR was poorly planned from the beginning , and destined to fail, government and parliamentary supporters blame the ongoing pandemic for the railway’s financial troubles. “The government should initiate the process of renegotiating the loan terms of the SGR with the lender (China) due to the prevailing economic distress occasioned by the effects of COVID-19,”  recommended the

The United States government is proposing to severely restrict access to student visas from a majority of African countries in an effort to crack down on visa overstays.  The new proposal by the Department of Homeland Security (DHS) calls for any country that crosses the 10% threshold rate to be limited to just two-year student visas, making it effectively impossible for students to attend standard four-year colleges or universities in the United States. If the DHS proposal is enacted, it will likely further accelerate the trend of African students turning to China for educational opportunities. By next year,  according to new research by the Beijing-based consultancy Development Reimagined , China will become the top destination for African students. In previous administrations, the United States regarded access to its higher education as a key part of its soft power agenda in places like Africa. Now, it appears that is no longer the case and, instead,  it’s China that is aggressiv

China’s ambassador-desingnate to South Africa, Chen Xiaodong, arrived at O.R. Tambo International Airport in Johannesburg yesterday to start his tour as Beijing’s sixth envoy to Pretoria. Chen’s appointment to the post reaffirms Beijing’s view that South Africa remains its most important diplomatic outpost on the continent. Chen is a senior diplomat with a long resume in both Africa and Asia.  Prior to coming to Pretoria, Chen was an Assistant Foreign Minister whose portfolio included Africa. He was also the ambassador to Singapore and before that spent five years as China’s top diplomat for West Asian and North African Affairs (aka MENA). Given his previous high-profile roles at the foreign ministry, he is already well acquainted with most African leaders and their respective foreign ministers. This might indicate that Chen will assume a larger role in China’s Africa policy beyond his duties in South Africa. Also, look for Chen to be a prominent figure at the Forum on China-Africa

Chinese diplomats in Africa are reaffirming President Xi Jinping’s pledge to make a COVID-19 vaccine available to people across the continent once it’s tested and ready for distribution. Fang Yi, the political attaché at the Chinese embassy in Uganda,  was among a number of Chinese diplomats who took to social media  on Wednesday to reaffirm this promise. But what Fang and other Chinese officials have not made clear is precisely how they plan to distribute a vaccine when it’s available. Right now, the key question is whether they plan to do it themselves or through a multilateral agency like the United Nations, the World Health Organization or  the global vaccine partnership, known as Covax ,which Beijing has yet to join. Either way, it’s going to be a formidable logistical challenge, given that  a sophisticated cold chain will be required  to keep the vacine chilled at -34C/-94F degrees. This is not going to be easy to do in most African countries. SUGGESTED READING AND VIEWING:

Long-time China-Africa market analyst Martyn Davies, the managing director for emerging markets at Deloitte, explains why the once dominant “Chimerica” (China-America) is now giving way to a new era of “ChiAfrica” (China-Africa) trade. W atch the full interview on the CNBC Africa website. Get a daily email packed with the latest China-Africa news and analysis. Read exclusive insights on the key trends shaping China-Africa relations. Connect with leading professionals on the China- Africa Experts Network. You've reached your free monthly article limit. Subscribe today for unlimited access. SUBSCRIBE: $15 per month SUBSCRIBE: $149 per year -17% Savings The post Martyn Davies: “African Economies Have Pivoted Towards a China-Centric Asia” appeared first on The China Africa Project . source https://chinaafricaproject.com/2020/09/24/martyn-davies-african-economies-have-pivoted-towards-a-china-centric-asia/?utm_source=rss&utm_medium=rss&utm_campaign

The Communist Party-controlled China Daily newspaper  published an interesting article today written by Lewis Ndichu , a research and policy analyst at the Kenya-based think tank Africa Policy Institute, that proposes how China’s Belt and Road Initiative can be integrated into the new African Continental Free Trade Agreement. Economically speaking, there’s a lot of synergy between these two initiatives. After all, China is building billions of dollars of transportation and manufacturing infrastructure that will be vital to the AfCTA’s success. The AfCFTA’s move towards efficient, tariff-free movement of goods across African borders will also make it easier to ship them out to China and other points along the BRI. But fusing these two agendas together politically could be problematic, both for some African countries and certainly for China’s rivals in the U.S. and Europe. The concern is that economically vulnerable states would become even more dependent on China, which could make the

Aminu Wali, 79, is long retired from a distinguished diplomatic career as Nigeria’s envoy to China, the United Nations and a stint as the country’s foreign minister. In a wide-ranging interview with the Premium Times newspaper, Wali reflected on the current state of ties with China and what he thinks many people don’t understand about this complex, multifaceted geopolitical relationship. Aminu Wali’s Reflections on the Current State of China-Nigeria Ties THE IMPORTANCE OF CHINESE MONEY:  “China is about the only power today with the resources to spare for our needs. Therefore, we cannot sit down and say because there is a problem between the East and West we should not get involved… As far as Nigeria is concerned, we are not selling out to the Chinese, neither is China trying to take over our resources. They would want to get involved in some of the activities that we do in this country for the resources that we have. At the same time, they are prepared also to give us the kind of s

Ever since the Chinese businessman, Sun Qiang,  was named development chief (Nkosuohene) of the small Ghanaian town of Kwahu-Abetifi  two weeks ago, social media has been in an uproar. According to reports, Sun was awarded the title for giving $5,000 to the community. The fact that he was given the honorary development chief title doesn’t seem to have bothered people as much as the photos of him being paraded around shirtless on the shoulders of townspeople. Popular Ghanaian YouTuber Wodemaya went to the town in southern Ghana to speak with the chief and Sun Qiang himself, to find out what happened. While this quest proved unsuccessful, he learned that people in the community are not pleased at all with their chief, who they accuse of engaging in shady business dealings with Sun. Rather than this whole affair being about a community development donation, Wodemaya contends that Sun’s relationship with the chief instead has more to do with logging and mining deals. W atch the full

The day that many African policymakers had long feared since the outbreak of COVID-19 earlier this year is now here. Zambia yesterday said it will be unable at this time to repay the interest on three Eurobonds, totally around $3 billion, and will effectively have to default on that portion of its debt. The government,  according to a statement released by the finance ministry , is asking investors to give the country some “breathing space” while it restructures its debts. “Zambia is currently faced with unprecedented liquidity constraints that have been exacerbated by the Covid-19 pandemic, resulting in a substantial decline in revenues,” said the statement. “A combination of declining revenues and increased unbudgeted costs caused by the Covid-19 pandemic have resulted in a material impact on the government’s available resources to make timely payments on its indebtedness, leading to increasing debt-servicing difficulties.” Zambian Finance Minister Bwalya Ng’andu is expected to pr

News of Zambia’s request to postpone payments on three Eurobond notes prompted immediate reactions from stakeholders in the financial services sector, economic policymakers and journalists.  Here’s a sampling of the reactions on Twitter: “Sad. It’s important to remember that (a) Zambia’s debt position was already precarious long before COVID and (b) several, I mean SEVERAL, people warned against the govt’s lax approach to debt contraction and management.”  — Zambian journalist Chipo Muwowo  (@CHIPMUWOWO) “The Financial Times reports that Zambia is heading for debt default. We urgently need  #china  + private creditors to join a structured debt reduction operation – time to convert debt liabilities into investments in health, education and the battle vs COVID.”  — Kevin Watkins, chief executive of Save the Children  (@KEVINWATKINS) “With Zambia halting interest payments on its Eurobonds, good moment to reread this: Zambia was a model in Wall Street’s rush to issue debt for the poor

Although China is by far Zambia’s largest bilateral creditor, the total amount owed to Beijing is less than what Lusaka has to pay to Eurobond holders and various other private creditors. The outlook for 2022 is especially dire because sizable Eurobond repayments are due. It is important to keep this context in mind because the Chinese proportion of Zambian debt receives much more attention on African social media and even in the White House. Factually incorrect references to Chinese “debt-trap diplomacy” in Zambia were included  in the 2018 speech by then-National Security Advisor John Bolton, in which he announced the Prosper Africa strategy . Image via Sergi Lanau, deputy chief economist at the Institute of International Finance. Get a daily email packed with the latest China-Africa news and analysis. Read exclusive insights on the key trends shaping China-Africa relations. Connect with leading professionals on the China- Africa Experts Network. You've reached

From the beginning of the COVID-19 economic crisis in Africa, African ministers have said repeatedly that they want to do everything possible to avoid a default on their commercial debt. Yesterday’s announcement by the Zambian government that it will delay repayments on $3 billion of Eurobonds has shown why they’re so concerned. Zambia’s Eurobonds plunged in London trading by 5% on its 2024 note. Already, African borrowers face a higher risk premium than countries in other regions and the Zambian default is probably not going to help the situation.  With global interest rates so low, even close to zero in the U.S., Europe, and Japan, it doesn’t make a lot of sense for countries to take on more bilateral concessional debt even at modest 2-3% interest rates. But the problem is if these same governments then turn to the private capital markets they’re going to be faced with the higher borrowing costs brought on by that risk premium, which is now baked into the price of bonds. Read mor

While Zambia is getting pummeled by investors for signaling that it’ll have to delay some Eurobond repayments, Angola is enjoying the opposite following bold reassurances from Osvaldo Joao, the state secretary for finance. ““We will always pay,”  he told Bloomberg on Monday. Rather than reprofile its Eurobond debt, Angolan policymakers have instead opted to restructure its loan portfolio with the International Monetary Fund and China. China and Chinese commercial lenders accounted for 45% of Angola’s external debt, or $22.4 billion at the end of last year, according to data from the central bank. Read  more on this story on the Bloomberg website. Get a daily email packed with the latest China-Africa news and analysis. Read exclusive insights on the key trends shaping China-Africa relations. Connect with leading professionals on the China- Africa Experts Network. You've reached your free monthly article limit. Subscribe today for unlimited access. SUBSCRIBE: $1

Ethiopia’s envoy to the United States, Fitsum Arega, used the occasion of the United Nations 75th anniversary to  renew a plea for urgent African debt relief  that was  first issued by Prime Minister Abiy Ahmed on March 24th. Prime Minister Abiy was the first African leader to sound the alarm over the burgeoning debt crisis in Africa brought on by the COVID-19 pandemic. Get a daily email packed with the latest China-Africa news and analysis. Read exclusive insights on the key trends shaping China-Africa relations. Connect with leading professionals on the China- Africa Experts Network. You've reached your free monthly article limit. Subscribe today for unlimited access. SUBSCRIBE: $15 per month SUBSCRIBE: $149 per year -17% Savings The post Ethiopia’s Ambassador to the U.S. Renews Urgent Plea for African Debt Relief appeared first on The China Africa Project . source https://chinaafricaproject.com/2020/09/23/ethiopias-ambassador-to-the-u-s-renews-urg

The Ugandan government has significantly increased its borrowing in a bid to help mitigate the financial impact of the ongoing economic crisis brought on by the COVID-19 pandemic. The Central Bank on Tuesday said that in the period from June 2019 to June 2020, borrowing increase by 21%. Most of those new loans came from the IMF,  Trade and Development Bank , and Stanbic Bank. While debt levels in Uganda have increased substantially over the past year, the Central Bank provided reassurances that at 40.8% of GDP the country’s debt sustainability remains manageable and the risk of debt distress is “low.” SUGGESTED READING: Reuters :  Uganda’s public debt surges in coronavirus crisis, central bank  says by Elias Biryabarema The Bank of Uganda :  State of the Economy – September 2020 Get a daily email packed with the latest China-Africa news and analysis. Read exclusive insights on the key trends shaping China-Africa relations. Connect with leading professionals on the Chin