Ghana, Guinea among top borrowers from China: Report
Ghana, Guinea and Ethiopia are leading the list of countries that have taken billions of dollars from China, the U.S.-China Economic and Security Review Commission has revealed.
In its 2023 report, the commission listed thirty-nine (39) countries which have owed the Chinese government monies, some in the millions and others in the billions.
Among these were sixteen (16) African countries and one (1) South American country that have been taking massive loans from the Chinese government for several years after their respective programmes under the International Monetary Fund (IMF) and World Bank’s Highly Indebted Poor Countries initiative in 1996.
The HIPC initiative was a debt relief programme introduced to assist countries owing unmanageable debt burdens to clear their debts.
In 2005, to accelerate progress toward the United Nations’ Sustainable Development Goals, the HIPC Initiative was supplemented by the Multilateral Debt Relief Initiative which gave countries completing the HIPC process 100 percent relief on eligible debts by the IMF, the World Bank, and the African Development Fund.
In its latest annual report (2023), the U.S.-China Economic and Security Review Commission listed Ghana, Guinea, Ethiopia, Tanzania and the Democratic Republic of Congo as the top five (5) borrowers from China with $31.1 bn, $21.9 bn, $14.8 bn, $12.6 bn and $12.1 bn respectively.
The rest among the top seventeen (17) were the Republic of Congo, Mozambique, Sudan, Zambia, Bolivia, Chat, Senegal, Niger, Mali, Cameroon, Mauritania, and Sierra Leone.
The report noted that the Chinese government continues to free-ride on international efforts to alleviate distressed countries’ financial burdens by continuously lending to developing countries.
While the U.S. and other international donors including the IMF continue to assist highly indebted countries by exercising debt forgiveness, Chinese lenders continue to increase loans to the country with higher and adjustable interest rates on loans which intend to exceed rates provided by Western governments and multilateral institutions.
“China has an established pattern of lending to Heavily Indebted Poor Countries (HIPC) participants following their initial participation, with the majority of Chinese loans to Comoros, the Republic of the Congo, Côte d’Ivoire, Guinea, Liberia, and Togo occurring after these countries completed the program in the early 2010s. With the notable exception of Côte d’Ivoire, all of these countries have publicly supported China’s conduct in the South China Sea and most have supported China’s policies in Hong Kong and Xinjiang. In addition, China typically does not disclose the terms of its loans, which makes it difficult for developing borrowers to directly compare interest rates across lenders,” parts of the statement indicated.
The U.S.-China Economic and Security Review Commission was created by the United States Congress in October 2000 with the legislative mandate to monitor, investigate, and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.
The U.S.-China Economic and Security Review Commission released its 2023 Annual Report to Congress in November.
