Economies in East Africa reportedly owe China some $29.42 billion they borrowed over the past one decade.
The loans were secured to grow the transport, communication, manufacturing and energy sectors of these economies.
The EastAfrican is reporting that the economies in the region now spend almost eight per cent of their revenues to service these loans.
The news website referred to a data from the China-Africa Research Initiative (Cari) at John Hopkins University to show how the East African economies are over burdened by these loans.
There are concerns the repayment of these loans is becoming a burden, impacting the growth of these economies.
In the latest data The EastAfrican published from John Hopkins University, Ethiopia owes Beijing $13.73 billion, followed by Kenya at $9.8 billion. Uganda owes $2.96 billion and Tanzania $2.34 billion.
Rwanda, South Sudan and Burundi owe China the least amounts — $289 million, $182 million and $99 million respectively.
The director of China-Africa Research Initiative (Cari) at John Hopkins University Deborah Brautigam is quoted as saying that “It is always important to look at whether these projects will generate enough economic activity to repay these loans, as opposed to being seen as merely ribbon-cutting opportunities”.
Where did the loans go?
According to The EastAfrican, its research showed that The bulk of the loans the East African nations took went into the transport sector, followed by power, communications and manufacturing.
China has always defended its trade and business relationship with African countries. Last month, China’ s special envoy to Africa, Xu Jinghu said Beijing was not burdening Africa with debt.
Mr. Xu had said that “It is baseless to shift the blame onto China for these African countries debt problems. Their debt position has ‘been built over time even before we came in.
We have to look at the fluctuations in the international economic situation vis-a-vis the price of minerals, their key exports. This is where the problem is, and not Chinese loans.”
More loans
China last month said it will provide $60 billion in financial support to Africa as it continues to strengthen its relations with the continent.
President Xi Jinping said at this year’s China-Africa summit that the financial support for Africa will include government assistance and investment.
Xi Jinping also said part of the financial support will cover financing by financial institutions and companies. The Chinese leader also revealed that China will increase its imports from Africa.
Imports will focus on non-resources products. There will be priority for African financial institutions’ bond issuances in China, according to Xi Jinping
Source: Africafeeds.com
