Debt Relief with Chinese Characteristics

Image: Flickr, Wu Zhiyi
Image: Flickr, Wu Zhiyi

As the COVID-19 crises continues worldwide, African economies are facing unprecedented challenges. According to the IMF, almost 20 African countries are in debt distress or at high risk of debt distress.

It is clear that another debt crisis is in the works. In 2017, according to the World Bank’s International Debt Statistics, China accounted for about 17 percent of African public and publicly-guaranteed debt. China has joined other G-20 countries in pledging a moratorium on principal and interest payments for 77 eligible low-income countries through 2020, but faces calls for further debt relief. In order to shed more light on how China is likely to handle COVID-19 related debt relief beyond the moratorium, researchers at SAIS—CARI compiled and analyzed an original dataset of past Chinese debt relief actions in Africa. Between 2000 and 2019, Chinese lenders cancelled US$ 3.4 billion in loans, restructured approximately US$ 7.5 billion, and refinanced another US$ 7.5 billion.

1 Jan 2020