IMF Conditionalities Contribute to Shortage of Health Workers: Africa Suffers

A nurse in Uganda is giving a woman an injection

July 14, 2020

IMF Conditionalities Contribute to Shortage of Health Workers

Lawrence Freeman

As I have told my friends for many years, the International Monetary Fund (IMF) is incapable of helping nations grow their economies. I do not believe the IMF can point to any success story, where its policies led to improving the standard of living of the population. Their macro-monetarist ideology fails to understand the essential driver of real (not monetary) growth. Following IMF prescriptions usually results in more suffering for the victim nation.  For a more in depth analysis read my article from last year: Africa Needs Real Economic Growth, Not IMF Accountants.

The report cited by the ActionAid and Public Service International highlights the failure of the IMF:  IMF Told Countries Facing Critical Health Worker Shortages to Cut Public Sector Wages The statistics are revealing, but should not be shocking to those of us who study physical economics. Throughout its history we have seen the IMF insist on cuts to meet to macro-economic goal at the expense of the population. This report clearly pinpoints the effects of tying loans to cuts back in healthcare. Africa was suffering from an acute shortage of healthcare workers before the COVID-19 pandemic. Sub-Saharan Africa has the fewest physicians per 1,000 population and the lowest number of hospital beds per 1,000 population.

It was pointed out by Ethiopian Prime Minister, Abiy Ahmed, earlier this year, that   payments of debt service equaled or surpassed the amount of money nations spent on healthcare.  He wrote “In 2019, 64 countries, nearly half of them in sub-Saharan Africa, spent more on servicing external debt than on health. Ethiopia spends twice as much on paying off external debt as on health.

African nations, or any country for that matter, should not be subjected to this kind of treatment. Human life is real and precious. Debt is merely a financial accounting mechanism. There is no equivalence.

The COVID-19 pandemic has revealed the failure of the world globalized financial system, which has been become decoupled from the real economy. Genuine economic growth uses credit to promote human life. President Franklin Roosevelt’s Bretton Woods system, in its perverted form, came to an end on August 15, 1971. For the last fifty years, the City of London-Wall Street centered financial system has become more corrupt each decade, serving the interest of a tiny few. Now is the time to launch a New Bretton Woods, dedicated to improve the conditions of life for all people of all nations. I will be writing more on this subject in the future.

Below are excerpts from the cited report:

“New analysis by ActionAid and Public Services International (PSI) reveals how International Monetary Fund (IMF) austerity policies restricted critical public employment in the lead up to the Covid-19 crisis. (emphassis added)

“The analysis, released to mark UN Public Service Day (23 June), shows that every single low income country which received IMF advice to cut or freeze public employment in the past three years had already been identified by the World Health Organisation (WHO) as facing a critical health worker shortage.

“Key findings include:

  • Of the 57 countries last identified by the WHO as facing critical health worker shortages, 24 received advice from the IMF to cut or freeze public sector wages.
  • When countries are told to contain wage bills – it means fewer doctors, nurses and frontline workers in countries already desperately short of medics.
  • All but one of the 18 low-income countries advised by the IMF to cut or freeze public sector employment funding, are currently below the WHO’s recommended nurse-to-population threshold of 30 per 10,000.
  • The WHO predicts that these countries will experience a collective shortage of at least 695,000 nurses by 2030.

“ActionAid’s 2020 report Who Cares for the Future: Finance Gender-responsive Public Services exposed the detrimental IMF loan conditions and austerity measures which have pushed 78% of low-income countries to plan for zero increase in public sector wages.

“When countries are told to contain wage bills it means fewer doctors, nurses and front line health workers in countries already desperately short of medics. This was a dangerous practice even before the Covid-19 pandemic and is unthinkable now.”

Read the full report: IMF Told Countries Facing Critical Health Worker Shortages to Cut Public Sector Wages

Read my earlier posts: 

VIDEO: Africa’s Healthcare Infrastructure Requires a New Bretton Woods

World Needs New Economic Platform to Fight COVID-19

New Economic Order Required to Combat COVID-19 in Africa

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

Ethiopian PM Abiy Ahmed: Debt Cancellation for the World to Survive

Coronavirus testing supplies being unloaded at the Bole International Airport in Addis Ababa, Ethiopia, in March.
Credit…Tiksa Negeri/Reuters

Lawrence Freeman

May 1, 2020

Ethiopian Prime Minister, Abiy Ahmed, has made an audacious salient call for debt cancellation for low income countries. It was published in the Opinion section of the April 30, New York Times, Why the Global Debt of Poor Nations Must Be Canceled, (printed in full below). PM Abiy is correct, debt cancellation is absolutely necessary to save lives and for developing nations to survive the COVID-19 pandemic. To compel a nation like Ethiopia to spend almost half of its revenue on debt service, while its people are suffering from a perfect storm of Desert Locust swarms, food insufficiency, and a weak healthcare infrastructure, is immoral if not criminal. PM Abiy wrote:

“At the very least, the suspension of debt payments should last not just until the end of 2020 but rather until well after the pandemic is truly over. It should involve not just debt suspension but debt cancellation…

“These steps need to be taken with a sense of urgency. The resources freed up will save lives and livelihoods in the short term, bring back hope and dynamism to low-income economies in the medium term and enable them to continue as the engines of sustainable global prosperity in the long term.

“In 2019, 64 countries, nearly half of them in sub-Saharan Africa, spent more on servicing external debt than on health. Ethiopia spends twice as much on paying off external debt as on health. We spend 47 percent of our merchandise export revenue on debt servicing…

“The dilemma Ethiopia faces is stark: Do we continue to pay toward debt or redirect resources to save lives and livelihoods?”

PM Abiy’s analysis of the urgent need for the cancellation of debt service is relevant to the exacerbating effect of COVID-19 in Africa’s rising food insecurity.

image
Smoked fish produced in Ghana is sold all over the country and in neighboring Togo – as long as transport routes and borders can remain open for the movement of food to markets. Credit Jane Hahn/Oxfam America

COVID-19 Worsens Food Crisis

In the month from March 30 to April 30, COVID-19 cases in Africa rose from 4,760 to 37,296-800% increase, and the total of deaths from 146 to 1,619-1,100% increase.  Experts are legitimately concerned, that millions more may die from hunger and poverty as a result of the needed efforts to reduce the spread of the coronavirus. Closing borders, stay at home orders, loss of income, interruption of supply chains, and disruption of traditional animal migration cycles inauspiciously contribute to amplifying food insecurity.

“If the pandemic worsens, as many as 50 million more people could face a food crisis in the [Sahel} region,” according to Coumba Sow, Food and Agricultural Organization Resilience Coordinator for West Africa in her interview: FAO: COVID19: 50 Million in Sahel Could Face Food Crisis. Coumba Sow reports that across West Africa, 11 million people need immediate food assistance and that this number could rise to 17 million in the period from June to August. She says that it is “crucial to anticipate COVID-19’s impacts on agriculture, food security and the lives of vulnerable women and children. Ensuring that food systems and food supply chains are maintained is one of the most important action to take at national and regional levels.”

The World Food Programme (WFP) projects that the number of people facing acute food insecurity could rise from 135 million to 265 million in 2020 as a result of COVID-19.  According to the WFP, five of the countries that had the worst food crisis in 2019 were located in Africa; Nigeria, Ethiopia, Sudan, South Sudan and the Democratic Republic of the Congo.

Arif Husain, economist for the WFP said: “COVID-19 is potentially catastrophic for millions who are hanging by a thread. It is a hammer blow for millions more who can only eat it they earn a wage. Lockdowns and global economic recession have already decimated their nest eggs. It only takes one more shock—like COVID-19 to push them over the edge.”

Mauritanian herders (Courtesy of UN-FAO)

 A New Financial Architecture Required

While debt cancellation is essential, international and federal mechanisms are required to issue i.e. create new lines of credit to build up nation-wide advanced healthcare infrastructure, which all African nations lack. This endeavor should be part of a much larger undertaking to place African nations on a path to become developed industrialized economies.  I discuss the importance of emerging nations  to generate physical economic wealth in my earlier article: World Needs New Economic Platform to Fight COVID-19. Trillions of dollars of new credit must become accessible for African nations to address the dearth of infrastructure in energy, roads, railroads, and healthcare, that is literally killing Africans, every day. Successful transformation of African nations requires an urgent focus on nurturing combined manufacturing-agricultural processing industries. Speaking at a Johns Hopkins webinar on April 22, Gyude Moore, former Liberian Minster of Public Works (2014-2018) emphasized that creating manufacturing jobs is essential to transitioning to a more developed economy.

What has been glaringly brought to the surface by the combined COVID-19 pandemic and the malnourishment of Africa’s population is; that the global economic-political system of the last five decades has failed. A new financial architecture is compulsory to save lives and put civilization on the trajectory of progress. This new financial architecture should encompass the following essential missions in Africa:

  • Cancellation of debt
  • New credit generation for physical economic growth
  • Massive investment in hard infrastructure
  • Urgent mobilization to establish modern health infrastructure
  • Significant upgrading of manufacturing and agricultural sectors

It is unacceptable in the twenty-first century for every nation not to be equipped with advanced modern healthcare infrastructure.  One of the most egregious defects of globalization is that nations have become dependent on imported food from thousands of miles away because it is somehow construed to be cheaper than producing food at home.

Nations exist to foster the continuation of a human culture moored to the conception that human life is sacred. There is no equivalency between servicing debt and safeguarding human life.  Money really has no intrinsic value. Banks are mere servicing bureaus of an economy.  Governments legitimately create credit to generate future physical wealth to benefit their citizens. When borrowing or lending arrangements fail to benefit society then they should be restructured or cancelled. Such financial reorganizations have been achieved many times throughout history.

PM Abiy has brought to the attention of the world, a profound underlying principle that should govern all national and international policy: the promotion of human life is supreme, monetary instruments are not.

Delaying the repayments to the Group of 20 is not enough.

By rime Minister of Ethiopia. Nobel Peace Prize Laureate, 2019

ADDIS ABABA, Ethiopia — On April 15, Group of 20 countries offered temporary relief to some of the world’s lowest-income countries by suspending debt repayments until the end of the year. It is a step in the right direction and provides an opportunity to redirect financial resources toward dealing with the coronavirus pandemic.

But if the world is to survive the punishing fallout of the pandemic and ensure that the economies of countries like mine bounce back, this initiative needs to be even more ambitious.

At the very least, the suspension of debt payments should last not just until the end of 2020 but rather until well after the pandemic is truly over. It should involve not just debt suspension but debt cancellation. Global creditors need to waive both official bilateral and commercial debt for low-income countries.

These steps need to be taken with a sense of urgency. The resources freed up will save lives and livelihoods in the short term, bring back hope and dynamism to low-income economies in the medium term and enable them to continue as the engines of sustainable global prosperity in the long term.

In 2019, 64 countries, nearly half of them in sub-Saharan Africa, spent more on servicing external debt than on health. Ethiopia spends twice as much on paying off external debt as on health. We spend 47 percent of our merchandise export revenue on debt servicing. The International Monetary Fund described Ethiopia as being at high risk of external debt distress.

The dilemma Ethiopia faces is stark: Do we continue to pay toward debt or redirect resources to save lives and livelihoods? Lives lost during the pandemic cannot be recovered; imperiled livelihoods cost more and take longer to recover.

Immediate and forceful action on debt will prevent a humanitarian disaster today and shore up our economy for tomorrow. We need to immediately divert resources from servicing debt toward responding adequately to the pandemic. We need to impede a temporary health crisis from turning into a chronic financial meltdown that could last for years, even decades.

Ethiopia must spend an extra $3 billion by the end of 2020 to address the consequences of the pandemic, while our balance of payments is set to deteriorate. Increasing health care spending is essential, irrespective of debt levels, but we have less money on hand, and much of it is due to creditors.

A moratorium on bilateral and commercial debt payments for the rest of this year will save Ethiopia $1.7 billion. Extending the moratorium till the end of 2022 would save an additional $3.5 billion.

Low income countries can use the financial resources freed up by cancellation or further deferment of debt repayments to invest in our battle against the pandemic, from providing necessary medical care to our citizens to ameliorating our financial difficulties.

In October, the I.M.F. reported that the five fastest-growing economies in the world were in sub-Saharan Africa, which includes Ethiopia. In early April, the World Bank reported that sub-Saharan Africa would face its first region wide recession in over 25 years and the region’s economy could shrink by as much as 5.1 percent.

This is not a result of bad policies, mismanagement or any other ill typically associated with developing economies. The recession will be the product of the coronavirus outbreak.

Preventing or at least minimizing the recession is critical to maintaining years of hard-won economic gains across the continent. The current moratorium in bilateral debt collection until the end of the year will help, but it won’t be enough, given the gravity of the challenge we face.

The moratorium must be extended until the coronavirus health emergency is over or canceled altogether. The creditors need to do this unconditionally.

Official bilateral creditors are no longer the principal source of external debt financing for many developing countries. Private-sector creditors, including investment banks and sovereign funds, are. They should play their part in the effort to rescue African economies from permanent paralysis with a sense of solidarity and shared responsibility. It would help avoid widespread sovereign defaults and chaos in the market.

And it would be morally indefensible if resources freed up from a moratorium in bilateral debt collections were to be used to pay private creditors instead of saving lives.

Most of our countries managed to borrow funds on the back of solid economic performance and highly promising and evidence-based development programs and trajectories. Nobody foresaw this promise being derailed by a once-in-a-century event such as the coronavirus pandemic.

Under these circumstances, there is no room for traditional arguments such as moral hazard. Low-income countries are seeking relief not because we squandered the money but because we need the resources to save lives and livelihoods.

It is in everybody’s enlightened self-interest that the borrowers be allowed breathing space to get back to relative health. The benefits of rehabilitation of the economies of the hardest-hit countries will be shared by all of us, just as the consequences of neglect will harm all of us.

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

 

 

Chinese ‘debt-trap’ Propaganda Exposed-Time to End Ignorance & Prejudice Against China in Africa

(Courtesy of Quartz Africa)

December 24, 2019

Deborah Brautigam, an expert on China-Africa relations, exposes the fraud of China’s debt-trap diplomacy in her report: A Critical look at Chinese ‘debt-trap diplomacy’ Brautigam, who is director of the Johns Hopkins Center for China-Africa Research Initiative, writes unequivocally that there is no evidence of an intentional effort  to trap African nations into owing debt to China. China is not manipulating African nations in an attempt to control their resources. Ironically this is what the Western institutions did to African nations  following their independence from colonialism. Whether out of ignorance and/or prejudice, Africans and Westerners have been repeating unfounded propaganda that China is the new colonizer of Africa. It is time to finally end this malicious mantra.

Excerpts:

“The Johns Hopkins School of Advanced International Studies curates a database on Chinese lending to Africa (Brautigam & Hwang, 2016). It has information on about more than 1000 loans and, so far, in Africa, we have not seen any examples where we would say the Chinese deliberately entangled another country in debt, and then used that debt to extract unfair or strategic advantages of some kind in Africa, including ‘asset seizures’. Angola, for example, has borrowed a huge amount from China. Of course, many of these loans are backed by Angola’s oil exports, but this is a commercial transaction. China is not getting huge strategic advantage in that relationship. Similarly, others have examined Chinese lending elsewhere in the world – some 3000 cases – and while some projects have been cancelled or renegotiated, none, aside from the single port in Sri Lanka, has been used to support the idea that the Chinese are seizing strategic assets when countries run into trouble with loan repayment (Kratz, Feng, & Wright, 2019).

The evidence so far, including the Sri Lankan case, shows that the drumbeat of alarm about Chinese banks’ funding of infrastructure across the BRI and beyond is overblown. In a study we conducted using our data on Chinese lending and African debt distress through 2017, China was a major player in only three low-income African countries that were considered by the IMF to be debt distressed or on the verge of debt distress (Eom, Brautigam, & Benabdallah, 2018). A similar country-by-country analysis that included use of our data shows that the Chinese are, by and large, not the major player in African debt distress (Jubilee Debt Campaign, 2018). Therefore, the role of China in African debt distress was limited when one remembers that there are 54 countries in Africa.”

Read: A Critical look at Chinese ‘debt-trap diplomacy’

Hunger and Poverty Are Killing Africa’s Children. It is a Crime Against Humanity: Must Cease Now!

July 2, 2019
Hunger in Africa is rising (courtesy of Africanews.com)

Although I do not agree in full with the analysis in the report: “For Lack of Will: Child Hunger in Africa,” written by the Ethiopian based African Child Policy Forum-ACPF, none the less, it provides a startling study of the horrific effects of hunger on Africa’s children that should be read by all. (See link below for PDF).

The study states that child hunger in Africa is increasing, and presents the following shocking statistics on hunger in Africa:

Globally 10,000 children die every day due to hunger, and in Africa, hunger contributes to about 45% of childhood mortality. One third of child deaths in Africa is attributable to micronutrient deficiencies. Almost half of all child deaths on the continent are caused by hunger!

  • Ninety per cent of children do not meet the criteria for minimum acceptable diet.
  • Sixty per cent of children do not meet the minimum meal frequency.
  • In 2017 alone 14 million children were affected by wasting.

Africa Needs Real Economic Growth

The report correctly identifies poverty as the primary cause for hunger-access to food, estimating that in 2013, 49% of children in sub-Saharan Africa lived in extreme poverty-less than $2 per day.

Unfortunately, the report commits a fundamental error when it repeats the commonly accepted specious statistics of economic growth for African nations.

“Growth in Africa over the last two decades has been impressive by historical and world standards. But it has not been inclusive, with little impact on child hunger.”  

If African economies had experienced real physical growth over recent years, then poverty and hunger would have declined. Instead, both poverty and hunger have increased in many sections of the sub-Saharan continent.

The reports of economic growth are inflated in a specific way; they do not measure real physical growth, but substitute calculations of price valuations of goods and services. There is a fundamental difference, which I will repeat here, because the actual criteria of economic growth is poorly understood.

Very briefly, true economic growth refers to enhancements in the physical production of goods necessary to sustain an expanding population at a constantly improving standard of living. The success of this growth depends on three essential features of an economy. An integrated infrastructure platform of rail, road, energy, and water. A viable manufacturing sector. Plus, the application of continued technology and scientific progress by an educated and healthy workforce. Of course, there is much more to be considered, but these requirements are indispensable. Simply adding up the price-valuations of extracted raw materials, real estate, services, stock exchanges, bank profits, etc. are measurements of monetarist values; not economic growth. Read my early post for fuller analysis: Africa Needs Real Economic Growth Not IMF Accountants

Various sleight of hand tricks and out right sophistry has been used to hide the reality that despite reports of so-called economic growth, poverty is increasing in sub-Saharan Africa, disproportionately compared to the rest of the world. Fallacious explanations have been given, like jobless economic growth, or growth that has not trickled down to the people, or non-inclusive growth. However, the bold truth is that Africa has not experienced the reputed growth that has been touted by all the financial intuitions, which sadly many Africans still believe and repeat.

According to this study, malnourishment has increased from 215.5 million in 2014 to 256.5 million in 2017. Other indicators of Africa’s poverty are; 338 million Africans living in extreme poverty, and 3.2 million children under the age of 5 die each other. Applying the figure of 45% of child deaths due to hunger, this would mean approximately 1.5 million African children die from hunger-poverty yearly.

What Need To Be Done

Under the section: “What is to be done?” the report states “No child should go hungry. This is a moral imperative.” I would add, that no adult, no human being should go hungry. While the study calls for radical transformative policies to be put in place, which is absolutely true, it then calls for “…government commitment to giving greater political visibility to ending child hunger.”

This is a grossly inadequate response to genocidal like elimination of Africans due to hunger. Since the liberation of African nations from colonial rule over six decades ago, the glaring lack of infrastructure and industrialization has plagued the continent. It has led to crippled economies, resulting in the deaths of hundreds of millions of Africans, which were preventable. While infrastructure in roads, rail, energy, ports etc. has finally begun to be built in the last decade, it is insufficient to address the glaring need of Africa’s existing 1.2 billion people and projected 2.5 billion by 2050.

Nothing less than a brute-force military-like commitment by Africans and their allies to inundate-saturate the continent with infrastructure, is required. This is the only pathway to eliminating hunger and poverty.  It should have been done years ago. It must be done now.

Read: Child Hunger in Africa

 

 

 

AU Amb Chihombori-Quao: “The African Sleeping Giant is Rising”-The Significance of the Africa Continental Free Trade Area

On June 2, 2019, I interviewed African Union Ambassador to the United States, Arikana Chihombori-Quao at her home, on the significance of the new agreement on an Africa Continental Free Trade Area-AfCFTA, initiated on May 30. The AfCFTA is intended to reduce tariffs and barriers between African nations to promote trade, and spur economic development throughout the continent.

 

In the interview above, Ambassador Arikana Chihombori-Quao, provides a provocative and optimistic analysis of what the newly enacted agreement for an Africa Continental Free Trade Area-AfCFTA will mean for continent over the coming years and decades.

Amb Chihombori emphasizes huge potential for the AfCFTA to double, triple and even quadruple intra-African trade, which today is a mere 16%-18% of total continental trade. According to the UN Commission on Africa, AfCFTA could increase intra-trade by 15% to 25%, that equals $50-$70 billion in the next 20 years.  The concept of AfCFTA is to enable each African with the opportunity to potentially access the continent’s multi-trillion dollar market and 1.2 billion buyers and sellers. Landry Signe of the US based Brookings Institute estimates that by 2030 AfCFTA could boost consumer and business spending to $6.7 trillion.

Historically, Amb Chihombori views the AfCFTA as a continuation of the struggle by African nations to liberate themselves from intended under-development imposed on Africa by the infamous Berlin Conference (1884-1885). She stresses that 56 years (and five days) after the founding of the Organization of Africa Unity-OAU (May 25, 1963), Africa will now be functioning as one trading bloc of nations, which is intended to equalize the international playing field. As the implementation of AfCFTA proceeds, Amb Chihombori believes that Africa will acquire the stature of a “heavy-weight” in global trade and commerce. She is also hoping that by the end of this year Africa will ratify the “Free Movement Protocol” that would allow Africans to live, travel, and work anywhere on the continent, thus complementing the AfCFTA

Amb Chihombori accentuates in this interview, that infrastructure is a level one priority for Africa in the AfCFTA. “Investment in infrastructure is an absolutely essential step for us to take as we move into the implementation of AfCFTA,” she says. The denial of basic infrastructure, power, access to water, education and healthcare, by the colonial powers following the Berlin Conference, kept African nations from  developing; by design. “Leaders in Africa are now discussing the building highways and high-speed rail from Cape Town to Cairo and Djibouti to Dakar.”

Challenging those who advocate reducing Africa’s population and falsely claiming that Africa’s growing population is a major contributor to Africa’s economic problems, Amb Chihombori asserts that: “Our youth is the biggest advantage we have over the rest of the world…Youth is our biggest asset.”

Amb Chihombori wants to make the US the number one trading partner with Africa, telling Americans; “that the African sleeping giant is rising-it is a new game.”

***The AfCFTA had already come under attack, even before its birth, by the International Monetary Fund-IMF. According to the People’s News Africa, the IMF warned African nations they could lose revenue, if the AfCFTA is enacted.

Rwanda’s President Paul Kagame quickly responded: “It is important that Africa gives the necessary considerations to the views and opinions by external entities and ‘development partners,’ it is more important at the same time that Africa becomes aware of what we want for ourselves, pursue what is good for the continent, and defend what is necessary for our collective development.”

Second Belt & Road Forum: Infrastructure is the Bedrock of Development

April 30, 2019

2nd Belt & Road Forum-April 25-27, 2019 (courtesy TheNews.com)

Xi Jinping’s Keynote to Belt and Road Forum Emphasized Goals of the BRI

Chinese President Xi Jinping’s speech to the opening ceremony of the Second Belt and Road Forum on April 26, “Working Together To Deliver a Brighter Future For Belt and Road Cooperation,” broadly laid out the BRF approach and prospects for the future.

“Together, we will create an even brighter future for Beltand Road cooperation…. The joint pursuit of the BRI aims to enhance connectivity and practical cooperation. It is about jointly meeting various challenges and risks confronting mankind and delivering win-win outcomes and common development…. A large number of cooperation projects have been launched, and the decisions of the first BRF have been smoothly implemented. More than 150 countries and international organizations have signed agreements on Belt and Road cooperation with China….
“Infrastructure is the bedrock of connectivity, while the lack of infrastructure has held up the development of many countries. High-quality, sustainable, resilient, affordable, inclusive and accessible infrastructure projects can help countries fully leverage their resource endowment, better integrate into the global supply, industrial and value chains, and realize inter-connected development. To this end, China will continue to work with other parties to build a connectivity network centering on economic corridors such as the New Eurasian Land Bridge….

“Innovation boosts productivity; it makes companies competitive and countries strong…. China will continue to carry out the Belt and Road Science, Technology and Innovation Cooperation Action Plan and Technology Transfer.”

President Xi also used his speech to present a list of a half-dozen major policy steps China has undertaken as part of its Opening Up strategy:
“First, we will expand market access for foreign investment in more areas….
“Second, we will intensify efforts to enhance international cooperation in intellectual property protection….
“Third, we will increase the import of goods and services on an even larger scale. China has a vast potential for increasing
consumption….
“Fourth, we will more effectively engage in international macro-economic policy coordination. A globalized economy calls for global governance. China will strengthen macro policy coordination with other major economies and keep the RMB exchange rate basically stable….
“Fifth, we will work harder to ensure the implementation of opening-up related policies.”

President Xi Jinping Chairs Roundtable at 2nd BRI Forum– ‘Boosting Connectivity for New Sources of Growth’

The concluding day of the 2nd Belt and Road Forum for International Cooperation in Beijing, President Xi Jinping chaired the Roundtable discussion among the 39 guests–37 heads of state plus the leaders of the IMF and United Nations. A joint communiqué has been issued (see separate slug,) and the Chinese Foreign Ministry has also posted a summary of the “Deliverables” from the Forum.

After a day of presentations, as well as sideline bilateral meetings, Xi and his wife Peng Liyuan hosted a welcome banquet for the national leaders. The cordial, but high-level tone of the deliberations April 25-27, was set in Xi’s keynote opening yesterday, when he happily welcomed everyone, “Good morning! As a line of a classical Chinese poem goes, ‘Spring and autumn are lovely seasons in which friends
together to climb up mountains and write poems.’ On this beautiful spring day, it gives me great pleasure to have you with us here at the Second Belt and Road Forum for International Cooperation (BRF).”

Read President Xi’s Key Note address

Second Belt & Road Forum Joint Communiqué States Development Commitments; Lists 35 Specific Economic Corridors–Including “The New Eurasian Land-Bridge”

The 37 national leaders were listed in the very first point of the Communiqué, and the following points identified the role of the “ancient Silk Road” to “the strengthening of the connectivity and the expansion of the world economy in the spirit of promoting peace and cooperation, openness, inclusiveness, equality, mutual learning and mutual benefit” and the role for today’s “Belt and Road cooperation” to do the same thing for the future. The remaining points were grouped under these headings: “Strengthening Development Policy Synergy”; and “Boosting
Infrastructure Connectivity”; and “Promoting Sustainable Development”; and “Strengthening Practical Cooperation”; and “Advancing People-to-People Exchanges”; concluding with, “Way Forward,” which stated, “We envisage the Belt and Road Forum on regular basis with possible follow-up events…[looking forward] to the 3rd Forum.”

Here is the full list of “Economic corridors” identified in the Communiqué:

(1) Addis Ababa-Djibouti economic corridor, including the
development of industrial parks along the economic corridor
(2) Agua Negra Pass International Tunnel
(3) Baku-Tbilisi-Kars new railway line and Alyat free
economic zone in Baku
(4) Brunei-Guangxi economic corridor
(5) China-Central Asia-West Asia economic corridor
(6) China-Europe Land-Sea Express Line
(7) China-Indochina Peninsula economic corridor, including
Laos-China economic corridor
(8) China-Kyrgyzstan-Uzbekistan International Highway
(9) China-Laos-Thailand Railway Cooperation
(10) China-Malaysia Qinzhou Industrial Park
(11) China-Mongolia-Russia economic corridor
(12) China-Myanmar economic corridor
(13) China-Pakistan economic corridor
(14) Eastern Economic Corridor in Thailand
(15) Economic corridor in Greater Mekong Subregion
(16) the EU Trans-European Transport Networks
(17) Europe-Caucasus-Asia International Transport corridor
and Trans-Caspian International Transport Route
(18) the Industrial Park “Great Stone”
(19) International North-South Transport Corridor (INSTC)
(20) the Lake Victoria-Mediterranean Sea Navigation
Line-Linkage Project (VICMED)
(21) the Lamu Port-South Sudan-Ethiopia Transport corridor
(22) Malaysia-China Kuantan Industrial Park
(23) the Nepal-China Trans-Himalayan Multi-dimensional
Connectivity Network, including Nepal-China cross-border railway
(24) New Eurasian Land Bridge
(25) the New International Land-Sea Trade Corridor of the
China- Singapore (Chongqing) Demonstration Initiative on
Strategic Connectivity
(26) Northern Corridor Trade Route in Africa linking the
maritime port of Mombasa to countries of the Great Lakes region
of Africa and Trans-Africa Highway
(27) North-South Passage Cairo-Capetown Pass-way
(28) the Port of Piraeus
(29) Port Sudan-Ethiopia Railway Connectivity
(30) Regional Comprehensive economic corridors in Indonesia
(31) the Suez Canal Economic Zone
(32) Transcontinental shipment of cargo using the capacities
of the Northern Sea Route
(33) Transoceanic fiber optic cable
(34) “Two Corridors and One Belt” Framework
(35) Uzbekistan-Tajikistan-China International Highway

Read entire communique of Belt-Road Forum

Belt and Road Is Unstoppable: `Critics’ Are Strong Supporters

The extraordinary attendance of governments, heads of state and government, and thousands of businesses at the Second Belt and Road Forum, comparing with the largest international meetings in history, was already proof that the Belt and Road Initiative (BRI) has expanded greatly since the first BRF in 2017 and is now  an unstoppable new paradigm of economy. After the Second BRF, certain myths of “backfire” and “criticism” in Asia also fell away.

Malaysian Prime Minister Mahathir Mohamed gave interviews in which he expressed full confidence in the BRI and surprise at its scope. Speaking to Bernama News Agency April 28, he said: “We feel that the [One Belt, One Road] OBOR initiative is not a domination plan by China, which would end up being controlled by China. Instead, it is a policy developed by all the countries, and not only focused on China. Previously … including the Trans-Pacific Partnership, developed countries made the proposals and asked us to accept them. This is not like that; the forum attendees are from small countries and they are sitting with China…They sit together at the same level, and talk about how to develop infrastructure projects.”

In an interview with China’s TV network CGTN, Dr. Mahathir said he had thought the Belt and Road was an infrastructure project for Asia.

“Now it is quite clear that it is, practially, a worldwide project …to improve connectivity and infrastructure development all over the world…I’m very glad I’m here, because now I understand better the character of the project. China has a lot of new technologies, and we need these new technologies.” He forecast large-scale Chinese investment and exports into Malaysia.

Indonesia’s investment minister, Harvard graduate Tom Lembong, who had been critical of China’s rail investments, told {South China Morning Post} that Indonesia has “found China’s openness to its feedback on improving the Belt and Road Initiative highly encouraging…. I believe in the next 5 to 10 years, BRI will stimulate additional investment in probably tens of billions of dollars [in Indonesia],” Lembong said.

In Europe, Italy and Austria are joining Portugal in planning issuance of “Panda Bonds” — infrastructure bonds issued by other countries in yuan, to be issued into China’s bond market. Even Germany Economics Minister Peter Altmaier found the Beijing forum “better than expected,” and is headed back with a Mittelstand delegation.

China Friend or Foe? Published in AU’s “Invest in Africa” magazine

Below is my article on China: Friend or Foe?-January 2019, that was published (abridged) in the African Union magazine: “Invest in Africa“-2019 vol 1. You can find it on page 65 (85 on the link to the magazine). There are many worth while articles to read in this volume of the AU magazine  

By Lawrence Freeman

January 1, 2019

          The short answer is a China is friend and contributor to Africa’s progress. Ignore all the propaganda, ignorance and outright lies claiming that China is the new colonizer of Africa. There is absolutely no truth in the contorted comparison between China’s involvement in Africa today, and 500 years of slavery and colonialism by Western nations.

          Following the successful September 3-4, Forum on China Africa Cooperation (FOCAC) summit in Beijing, we have witnessed an escalated disinformation campaign alleging that China is attempting to snare African nations in a new “debt-trap.” New vicious rumors have emerged that China is taking over ownership of key infrastructure projects in Africa. Every African Head of State who has spoken out, has refuted these allegations and praised their cooperative relationship with China.  

According to a report by the British based Jubilee Debt Campaign, “Africa’s growing debt crisis: Who is the debt owed to?” China is owed a minority of external debt. Their figures compiled from the World Bank and the China Africa Research Institute show that 20% of African government external debt is owed to China in contrast 32% to private lenders, and 35% to multilateral institutions such as the World Bank.

Of these 14 countries that have they examined: 11 owe less than 18% of their debt to China (Burundi, Cape Verde, Central African Republic, Chad, Gambia, Ghana, Mauritania, Mozambique, Sao Tome and Principe, South Sudan, Sudan and Zimbabwe); and three owe more than 24% -Djibouti (68%), Zambia (30%) and Cameroon (29%).

The proponents of the “debt-trap” accusation conspicuously, egregiously omit from their chronicle the history of the financial imprisonment of the then newly independent African nations by the IMF, World Bank, Paris Club, and their kith and kin in the City of London and Wall Street. Through manipulation of terms of trade, controlling prices, and forcing currency deviations, African nations found themselves shackled in several hundred billion dollars of new debt to the West shortly after African nations achieved liberation from imperialist colonial masters. Western debt replaced slavery and colonialism as the new method of looting Africa of its wealth, reinforced by the ill-fated Structural Adjustment Programs-SAPs, otherwise known as the “Washington Consensus.”

So, who is kidding whom about a “debt-trap?”

Debt for Infrastructure is Necessary

Railroads from the colonial period versus railroads of the future. The East-West and North-South railroads are long overdue

Credits issued for hard infrastructure; energy, railroads, ports, roads, bridges, and soft infrastructure in well equipped; schools, libraries, universities, and hospitals will always result in an increase in productivity i.e. the economic power of the society. By employing advanced technologies embedded in new capital equipment, including infrastructure, farmers and workers can produce more efficiently. Simply providing abundant energy, high-speed railroads, and water inputs to an African nation would lead to a jump in economic output.

All nations that have experienced real economic growth and raised the living standard of their citizens have created credit i.e. public-sector debt or borrowed debt at non-usurious interest rates for targeted physical economic growth.

China is the single largest nation contributing to financing and constructing of infrastructure projects in Africa according, to Deloitte’s 2017 edition of Africa Constructive Trends. The report examines 303 infrastructure projects begun in the first half of 2017 that costs over $50 million. Appropriately, energy& power, and transport comprise 167 of these projects-over 55% of the total. While African governments fund 27.1 % of the funding, China accounts for 15.5% of the funding and 28.1% of the construction for these projects. The US accounts for 3% and 3.3% respectively. Both Italy and France are larger than  the US percentage in building infrastructure in Africa. 

African Development Bank President, Akinwumi Adesina, speaking on November 28, 2016 accurately linked the deadly migrant crisis to deficiencies in Africa’s economic development and infrastructure.

“I believe that Africa development deserves significant support, even in the midst of these challenges. We must not forget that the reason several thousands of Africans have been (illegally) migrating to Europe, is because of the lack of jobs and shrinking economic opportunities at home. Our result must not be to reduce support, but to increase support to help build greater resilience, boost its economies, address its structural challenge, such as closing its huge infrastructure gap, strengthening intra-related trade, and creating jobs for its teeming youths.”

A study done by the AidData Research Lab at William and Mary College in Virginia that analyzed China’s investments in the developing sector between 2000 and 2014, concluded:

“We find that Chinese development projects in general, and Chinese transportation projects in particular, reduce economic inequality within and between sub-national localities,” and “produce positive economic spillover that leads to a more equal distribution of economic activity.”

China has come to know, what the US has forgotten, that infrastructure is the sine qua non to drive economic growth. 

Africa’s huge infrastructure deficit is the causal factor for widespread poverty, and insecurity across the continent, precisely that which China has begun to address over the last decade. The Western financial system that dominated Africa from 1960-2000 contributed almost nothing to help African nations industrialize and failed to help create vibrant agro-manufacturing sectors. China with its Belt and Road Initiative has presented the world with a new paradigm to guide political-economic relations among nations; Africa is the beneficiary.

Lawrence Freeman is a Political-Economic Analyst for Africa, and Vice Chairman of the International Scientific Advisory Committee to the Lake Chad Basin Commission

Africa Needs Real Economic Growth, Not IMF Accountants

February 4, 2019

A recent forum sponsored by Brookings Institute in Washington DC entitled: “Top priorities for Africa in 2019” produced a healthy discussion that alluded to important fundamental conceptions of economics. Although the deeper principles of what should be called economic science were not elucidated, issues raised in the dialogue serve as a useful starting point for further elaboration of that subject.

The event was organized to present FORESIGHT AFRICA, a new publication by the Africa Growth Initiative. Representative from the International Monetary Fund-(IMF), and Mo Ibrahim Foundation, joined Ambassador Linda-Thomas Greenfield, and Brahima Coulibaly, director of the African Growth Initiative, for a wide-ranging discussion on the future of Africa to a packed audience.  

Members of the audience challenged the prevailing assumptions of the International Monetary Fund. One participant raised the inadequacy of the IMF’s rigid macro-analytic approach, when what is needed, she said, is a fine-tuned micro-economic intervention to deal with the scope of the challenges facing African nations. Another suggested the need for a state-funded public sector job program to put the millions of unemployed youth to work—a proposal which the IMF representative categorically rejected. The IMF’s hostility to state sector involvement belies the several hundred-year historical record of the modern economy, which is replete with successful and indispensable interventions by the state to foster economic growth.

Measuring Real Economic Growth      

While the Brookings report, FORESIGHT AFRICA, provides some relevant statistics, its analysis rests on erroneous axioms of what comprises economic growth

The commonly accepted notion that African nations today are experiencing “jobless economic growth” reveals the fundamental antagonism between the analysis of the IMF and its co-thinkers, and proponents of real i.e. physical-economic growth. Jobless growth is a moronic oxymoron.  Real*economic growth augments the productive power of society to increase its surplus of tangible wealth in order to sustain an expanding population at a higher standard of living. The IMF pretends to measure growth by adding up monetary values such as the price of extracted resources and real estate, stock market gains, etc.  The aggregation of prices is not a measure of the economy’s growth.  The only true calculation for economic growth is the result: an improvement in the living conditions of the population.

Africa’s Bright Economic Future Is Its Youth

Creating Real Economic Growth          

An excellent example of this defective thinking is highlighted in the article from the Brookings report entitled “How Industries without smokestacks can address Africa’s youth unemployment crisis.”  Author John Page reports that Africa has not only failed to industrialize, but shockingly, its share of global manufacturing today is smaller than it was in 1980! He forecast that Africa’s working age population (15-64 years of age) will grow by 450 million between 2015 and 2035, and that “20 percent of new employment for wages will be in the service sector, and only 4 to 5 percent will be in a wage paying job in industry.” His conclusions for the future of youth employment in Africa are ill-founded and deadly when he states that since: “industry has declined as a share of output and employment…over the past four decades…Africa may not be able to rely on industry to lead structural change…”

Page then proceeds to dangerously postulate the equivalence of employment in manufacturing with tourists and service jobs. He writes: “The same forces that limit Africa’s opportunities in industry, however, are also creating a growing number of tradeable services—such as tourism and remote office services…”

“Growth in tourism is outpacing manufacturing in many African countries… It has the potential to create some of the millions of formal sector jobs Africa needs each year to employ youth entering the labor force…”

This is not an academic question for the people of Africa. We should all be level-headed about the implications of this prognostication: without industrialization Africans will die. African are dying every day due to lack of infrastructure, a diminutive manufacturing sector, and an inefficient food-producing industry. The industrialization of Africa with a massive expansion of its manufacturing base is not an option, but a life-or-death necessity!

Nor is this conjecture on my part. From the standpoint of economic science of physical economy there is no equivalence. Manufacturing, by transforming nature and producing needed goods, contributes real value to society; tourism and services do not. A variety of services are required for a functioning society, but this sector should not perform role of a primary employer for new entrants into the labor force. Tourism serves no vital task except to promote the natural beauty of a county.  No new wealth is created by tourism; it is essentially collecting other people’s earned income.

Service-related jobs, whether useful or not, will never lead to real economic growth for one elementary reason. They do not contribute to the creation of new wealth. A properly organized economy would only have a relatively small percentage of its employed labor in the service sector. To do otherwise, as some African nations unfortunately are, is not sustainable, and will lead to calamity. To equate non-goods producing employment with manufacturing jobs is a grave fundamental error that should be rejected by serious economists and leaders.

Africa’s Youth Bulge Is Not A Curse

FORESIGHT AFRICA estimates that today 60% of Africa’s 1.25 billion people are under 25 years of age. That amounts to 750 million youth, a majority of which are unemployed or mis-employed in the pathological informal economy. It is projected that in sub-Saharan Africa alone, the youth population will expand by 522 million, and comprise one-third of the world’s youth by 2050. Thus, making  Africa the continent with the youngest population, and potentially the largest workforce on the planet.

While these figures are striking, they do not justify enforced population reduction measures, as extremists advocate. Human life is intrinsically sacred because it is endowed with the divine spark of creativity. Contrary to popular misguided opinion, human creativity is the underlying source of all wealth; not money or even natural resources.  Paleoanthropology shows us that millions of years ago before the emergence of homo sapiens-sapiens (wise-wise man), proto-humans, homo hablis, (handy man) designed tools first in the mind’s eye before shaping rocks into useful implements that were used to transform the environment for the benefit of mankind. Africa is not facing a crisis of too many people, but rather the urgency to formulate the best policies today that will incorporate millions of youth as productive members of the labor force.

What African nations most desperately need, and which will have the greatest impact of their economies, is infrastructure, infrastructure, and more infrastructure.  It is not hyperbole to state that the lack of infrastructure is responsible for millions of deaths on the continent. The dearth of on-grid energy, arguably the most crucial component of an industrialized-manufacturing society, is preventing African nations from attaining the levels of economic growth required to sustain their populations.

For example. If we desire, as we should, that Africans enjoy the same relative living standard as Western nations, then each of the 2.5 billion Africans in the year 2050 should have access to at least one kilowatt (1,000 watts) of power every day. That would require, starting immediately, erecting enough power plants to generate 2,400 gigawatts of electricity. Itemize the bill of materials to build that many thermal, hydro, and nuclear power plants.

Now contemplate the number of workers that would be employed in this endeavor. Extend the same mode of thinking to constructing hundreds of thousands of kilometers of high-speed rail lines to connect the major cities, ports, and manufacturing centers across this vast continent. Add to that the number of new roads, hospitals, schools, libraries, and water ways that need to be built to provide an adequate standard of living. How many tens of millions or more youths will Africa need to employ in just the construction of primary infrastructure projects? Imagine how many additional jobs will be created in the spin-off industries.

Nuclear Energy is Critical to Meet Africa’s Energy Needs (ESI Africa)

Africa’s Future Begins Today

Trillions of dollars of long-term low interest credit must be made available to fund these projects. Only state-issued public credit will suffice for this scope of investment. The private sector, investments funds, or any other fund that is motivated by seeking high yield and quick financial returns on their investment will never, ever, underwrite the credit necessary. The overriding concern of the nation state is not making quick monetary profits, but the welfare of its citizens living and their posterity.  The IMF thus far shown itself to be mentally, emotionally, and ideologically incapable of comprehending the true economic needs of Africa, or how to fund them. Those who are blinded by their erroneous view of evaluating an economy by its monetary worth, will forever be incompetent, and are not qualified to give advice, much less diktats to developing nations.

Credit issuance by the nation state is not a new or novel concept. The success of United States’ economy, which was maintained with ups and downs until its decline over the last five decades, emanated from the accomplishment of President George Washington’s Treasury Secretary, Alexander Hamilton.  It was Hamilton’s understanding of credit and the central role of manufacturing that created the basis for U.S. economic growth from thirteen indebted colonies.  Over the last 230 years, those leaders, in the U.S. or abroad, who were wise enough to comprehend and apply Hamilton’s understanding of national banking and credit, have been successful in stimulating economic growth for their nations.

Africa’s future does not begin in 2050; it begins now. It is incumbent on Africans, with the assistance of their friends and allies, to prioritize crucial transformative infrastructure and related projects that must be built and funded. This cannot wait. This is a war to eradicate poverty, hunger, and disease, and secure a productive life for billions of Africans living and yet to be born. Thus, this campaign should be conducted with a military-like commitment to achieve objectives and goals each month and each year. Hence, we are not waiting for the future; we are creating the future in the present.

*real and true are interchangeable terms signifying a physical (non-monetary) improvement in the economy.

Lawrence Freeman has been involved in Africa for over 25 years as a writer, analyst, and consultant. He teaches courses on African History in Maryland. In 2014 he was appointed Vice chairman of the Scientific Advisory Committee to the Lake Chad Basin Commission.

Guardian of Nigeria Publishes “Proposal for Nigeria’s Future” by Lawrence Freeman

The Guardian of Nigeria published on Monday, January 28, 2019, my article: “Proposal for Nigeria’s Future”  with included pictures of President Trump, President Xi, and myself that were omitted from the on-line article.

 

Proposal for Nigeria’s future

 

Don’t Listen to Propaganda & Gossip. Follow the Facts: China is not Creating a ‘debt-trap’ for Africa

A useful report, “Africa’s growing debt crisis: Who is the debt owed to?” by the British based Jubilee Debt Campaign, again belies the propaganda and gossip that China is manipulating African nations into a ‘debt-trap.’  This report excerpted below, using figures from the World Bank, and the China Africa Research Institute-(CARI) at Johns Hopkins SAIS in Washington DC, shows the percentage of debt owed to China by African nations is not the cause of a debt crisis. In fact, in many cases the debt owed to China is less than the total owed to Western nations and financial institutions.

It is clear that for strictly geo-political reasons many Western think tanks and various media have gone into overdrive demonizing China with false claims of a new ‘debt-trap.’ This has also led to increased attacks on African leaders, portraying them as weak and not acting in the interest of their citizens. They have been accused of succumbing to China, which has been dubbed, the new imperial power. Sadly, many Africans have been duped, or simply out of frustration and anger, joined this western orchestrated chorus.

Of course, the truth of the matter is quite different. From the early 1980s on Western financial intuitions such as the IMF, World Bank, and Paris Club, loaded up African nations with so much debt that they were unable to service the debt, forcing them into unpayable arrears.  The vicious irony, is that several hundred billion dollars of debt lent by the West was never meant to actual develop African economies. It was in fact, intended to create a real ‘debt-trap’ for Africa. It has only been in the last ten years that Africa’s huge deficit in infrastructure is being addressed in collaboration with China’s non-western model of development. As I have written over many years, debt is not the problem when it is used as credit to improve the productive powers of a society to increase its physical wealth. Technologically advanced infrastructure is an excellent, if not the premiere method to drive an economy forward. This is exactly what China is accomplishing through its Belt and Road Initiative, and is at the heart of the Forum on China-Africa Cooperation-(FOCAC).

Unfortunately, the dominance of the “geo-political” ideology since the death of Franklin Roosevelt has thoroughly contaminated the thinking of Westerners and Africans alike. Creating a culture (with few exceptions) of people unable to think strategically, and who cynically reject the idea that a powerful nation would extend itself to actually assist other nations. China, according to all accounts, has lifted 700 million of its people out of poverty. President Xi Xinping has pledged to help eliminate poverty in Africa, the continent with highest rate of poverty in the world. Yet, many Africans reject this offer as insincere, suggesting a sinister motive lurking behind China’s offer. This attitude, is in part, the result of today’s political culture, which has failed to understand one of the most profound universal principles: all mankind shares a common interest in the development of the creative potential of each and every human being.  

Let us all agree, now, that we will all act on the this principle of the common good, and affirm as did the Treaty of Westphalia, that the interest of the other is also the interest of thy self.

 

Forum On China-Africa Cooperation, Beijing, September 3-4, 2018

“Africa’s growing debt crisis: Who is the debt owed to?”

October 2018

(excerpts follow)

Summary
• African government external debt payments have doubled in two years, from an average of
5.9% of government revenue in 2015 to 11.8% in 2017
• 20% of African government external debt is owed to China
• 17% of African government external interest payments are made to China
• In contrast, 32% of African government external debt is owed to private lenders, and 35% to
multilateral institutions such as the World Bank
• 55% of external interest payments are to private creditors

Minimum amount of African government external debt owed to China as percentage of total debt is 18%

Creditor grouping, total debt owed, percentage of external debt owed, are as follows:
China $72 billion 18%
Paris Club $40 billion 10%
Other governments $18 billion 4%
World Bank $66 billion 16%
IMF $18 billion 4%
Other multilateral institutions $61 billion 15%
Private sector $132 billion 32%
Total $407 billion 

Maximum amount of African government external debt owed to China as percentage of total debt is 24%

Creditor grouping’Total debt owed, percentage of external debt owed, are as follows:
China $100 billion 24%
Paris Club $40 billion 10%
World Bank $66 billion 16%
IMF $18 billion 4%
Other multilateral institutions $61 billion 15%
Private sector (excl. Chinese
private sector)
$132 billion 32%
Total $417 billion

Checking these figures through country cases

Another way of identifying how much African government debt is owed to China is to look bottom-up at the individual data available by each government.

Of these 16 countries, 14 have figures on how much debt is owed to China (for the full analysis see Appendix 1.). Of these 14:

• 11 owe less than 18% of their debt to China (Burundi, Cabo Verde, Central African Republic, Chad, Gambia, Ghana, Mauritania, Mozambique, Sao Tome and Principe, South Sudan, Sudan and Zimbabwe).
• Three owe more than 24% -Djibouti (68%), Zambia (30%) and Cameroon (29%).
• The mean average amount owed to China is 15% of a government’s external debt, and the median average is 8%

Read Complete Report: Who Is Africa Debt’s Owed To?