“Africa does not have a debt problem with China,” stressed Eric Orlander, co-founder of the China Africa Project. “Oftentimes, we hear that there’s an African debt crisis with China, but [only] about 10 African countries have a debt problem with China….That leaves a majority of countries that do not have a debt problem with China.” Orlander was speaking at a virtual event sponsored by financial news outfit Quartz Africa on Thursday, Oct. 8.
A study released that day by the global financial consultancy Rhodium Group, which combed through outstanding financial data (China does not publicize this information) — examining 130 cases dating back to 2000 on a global scale — found essentially the same thing. As should be the case, China handles its debt negotiations on a bilateral basis, tailoring its restructuring arrangements with each country individually. That way, although an individual debtor’s credit rating may suffer, it is not destroyed, and the debtor can still borrow on the international market. Requests for these negotiations are understandably increasing this year: Rhodium discovered “at least 18” cases have occurred so far in 2020, and another 12 are ongoing.
