October 27, 2021Africa
African borrowers need to wake up to the reality of Chinese loans
Chinese lending to developing countries has come under sharp focus since the release of several reports that have reshaped the debate. The only way to determine the true cost of Chinese loans is through greater transparency, better regulation, and accountability by both the lending and borrowing countries.
The fact that African leaders have very little leverage to compel Chinese lenders to reform their lending practices means that any realistic mitigation would have to come from the borrowers’ side. The fact that a number of African leaders also have their own selfish reasons for choosing opacity, means that pressure for reform will have to come from the public.
The Zambia case shows how Chinese lenders and African leaders are often driven by personal interest colluded through omission and commission to help push the country into a full-blown debt crisis.
