China denies pushing Africa into a debt trap

By Ephrahim Bahemu & Jacob Mosenda

(The Citizen 5th March 2023)


  • China has dished out over $1 trillion as loans to nearly 150 developing and least-developed countries, becoming the world’s largest official creditor for the first time

Beijing.  While China is approaching the 10th anniversary of its Belt and Road Initiative (BRI), senior leaders in the second largest economy in the world have continued to defend it, saying it is not a debt trap for Africa as some people have described.

Yesterday, the spokesperson of the 14th National People’s Congress (NPC), Mr Wang Chao, defended the BRI in a press conference ahead of the Beginning of the Two Sessions of China (the annual plenary sessions of the National People’s Congress (the national legislature) and of the Chinese People’s Political Consultative Conference (the national political advisory body).

So far under the BRI, China has dished out over $1 trillion as loans to nearly 150 developing and least-developed countries, becoming the world’s largest official creditor for the first time.

About BRI and the debt trap for developing countries, Mr Chao, who is the former deputy minister of Foreign Affairs of China, said that until now, more than 150 countries and more than 30 international institutions have signed the BRI cooperation agreement, which has brought positive results for the economy, employment, and people’s welfare. “The BRI programme does not aim to gain its own political interests.” And even in the so-called “debt trap,” if you look at the data from international institutions, you will find that this thing does not exist. “According to the World Bank, China is not Africa’s biggest creditor, and almost three-quarters of Africa’s debt is from financial institutions and commercial banks,” he said.

However, he said China has been making great efforts to help African countries reduce their debt burden through the suspension of debt repayment for a certain period of time, especially when the country is facing economic challenges. He said that China is ready to sit down with its partners to evaluate the successes and experiences gained through the BRI, as well as plan for the future and work on the existing cooperation at the highest levels.

Prof Jehovaness Aikaeli, an economist from the University of Dar es Salaam, said, “We should not blame other countries like China when they come up with initiatives that are of great interest to them; instead, we are the ones who should as well decide for the best interest of our country,” said the economist from the University of Dar es Salaam. “There is nobody who is forcing you to borrow. The BRI does not tell you that you must borrow from China; rather, it is up to African countries to think and see how to go about it.” “Our (African) countries like Tanzania are supposed to put the country’s interests first and act accordingly,” he noted.

“BRI will be a debt trap if you borrow without thinking of your own internal interests and economic condition. So African countries should make their own decisions carefully and prudently by looking at their debt sustainability,” he said.

An expert in economic diplomacy, Dr Abdul Mfumbazi, said, “We cannot limit China from doing business with African countries, but African countries should limit themselves from being attracted to loans. So whether it’s a win-win situation depends on each party’s interests,” he noted.

Regarding the relationship between China and Europe, Mr Chao said that China has been making great efforts to strengthen its relationship with European countries, with President Xi Jinping meeting with the top leaders from that region at different times, so his belief is that the situation will continue to improve because both sides have common global interests.

However, he said that China and Europe differ in history, culture, and development, so it is normal for them to differ in their views and opinions on some things, but all parties have a responsibility to implement things together, such as climate change and world peace. “In recent years, there have been people who say that China is a new threat to European countries, but those words have no basis; China always looks at Europe as its strategic partner, and we hope that Europe views it the same way, and that cooperation and business between us will increase,” he said.

Regarding the issue of China strengthening its army as announced during the 20th CPC National Congress, Mr Chao said the modernization of the Chinese Army is based on the needs of the nation, which is normal for all nations. “When the economy increases, it is also important to have defence strategies as one of the needs of the country.” “I cannot say whether the defence budget will increase or not; it will be known later, but the improvement of defence that will be done is not a threat to any country, but it is in the interest of world peace and the defence of China and its people,” he said.

About BRI, the Ambassador of Tanzania in China, Mbelwa Kairuki, said that the initiative is a platform for international cooperation in matters of policy, trade, infrastructure, and economy; they commit to something; it is a good project, and “no one is forced to join; it is voluntary,” said Ambassador Kairuki, while adding that it is the responsibility of the leaders of the respective nations to be fair and put the interests of their nations first.

He said that within the five years of the BRI, Tanzania and China have increased their trade volume to 8.6 billion dollars, and more than 6,000 Tanzanians have had the opportunity to study and learn various courses in China in the short and long term.

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