Nelle ultime settimane, alla crisi di sicurezza nel Mali settentrionale e centrale si è aggiunta una grave crisi socio-politica, con proteste più o meno violente diffuse nella capitale del paese, Bamako.
Twenty-five years after the conclusion of the brutal Mozambican Civil War (1975-92), the insurgent group known as Ahlus Sunna wal Jamaa (local script; acronym: ASWJ) is causing havoc in one of FRELIMO’s strongholds—the province of Cabo Delgado.
Africa’s growing public debt had sparked a renewed global debate about debt sustainability on the continent well before the Covid-19 pandemic took centre stage. Africa’s alleged unsustainable indebtedness is largely owing to the emergence of China as a major financier of African infrastructures, resulting in a narrative that China is using debt to gain geopolitical leverage by trapping poor countries in unsustainable loans while pushing them to over depend on Chinese credit, companies, labour and goods.
In response to the COVID19 crisis, governments across the world, including in Africa, have had to rapidly expand their budgets for healthcare and to avoid widespread poverty as economic activity slows. There are concerns that African countries are – as a result – vulnerable to a protracted debt crisis. The framing of this, however, may lead to the wrong policy prescriptions, and this is why.
As the pandemic continues to constrain the fiscal space of African countries – given the slowdown in domestic economies and decline in commodity prices – and occurs in a context where 40% of the continent was already faced with unsustainable debt burdens, discussions around restructuring Africa’s debt have begun to gain traction.
Africa’s development aspirations have always rested on the possibilities and policies inherent in achieving rapid industrialisation. Africans believe that key interventions in industrial policy would lay the foundation for sustained growth, business and job creation. In contemporary China, African policy makers seem to have found a development partner whose interests, experiences and capacities match these continental ambitions.
In the space of a decade and a half, China has become Africa’s largest bilateral creditor, with having committed to lend over 150bn USD between 2000-2018, larger than any OECD (Organization for Economic Cooperation and Development) lender, and near-matching the World Bank in Africa. Along with growing trade and Foreign Direct Investments (FDI), these capital flows from China, accelerating under the Belt and Road Initiative (BRI), have been met with consternation from the US and western media outlets.
Between 2000 and 2011, Beijing’s policy banks gave US$53.4 billion in concessional loans and lines of credit to 43 African countries; this trend accelerated after 2012, as noted above, bringing Africa’s debt to China sharply up to US$143 billion by 2017, with loans provided by the China Development Bank (CDB) and the EXIM Bank of China reaching US$35.5 billion and US$55.7 billion respectively. This represents roughly 22.9% of China’s total external loans and a similar percentage, 22% or so, of Africa’s entire external debts.
Africa’s growing public debt had sparked a renewed global debate about debt sustainability on the continent well before the COVID-19 pandemic. Africa’s allegedly unsustainable indebtedness is largely owing to the emergence of China as a major financier of African infrastructure, resulting in a narrative that China is using debt to gain geopolitical leverage by trapping poor countries into unsustainable loans.
The COVID-19 crisis is likely to have a devastating effect on Africa. As of June 2020 the number of cases is surprisingly small, which may reflect inadequate testing or an early stage of a much worse epidemic. But what is clear is that the economic impact of the worldwide epidemic will bring the most severe recession that Africa has experienced for decades.