Dr Alex Vines OBE, Creon Butler, Dr Yu Jie
The economic consequences of the COVID-19 pandemic and Russia’s invasion of Ukraine have undermined the ability of many African nations to service their sovereign debts. At present, 22 low-income African countries are either already in debt distress or at high risk of debt distress.
Chinese lenders account for 12 per cent of Africa’s private and public external debt, which increased more than fivefold to $696 billion from 2000 to 2020. China is a major creditor of many African nations, but its lending has fallen in recent years and is set to remain at lower levels. This situation is likely to worsen over 2023, limiting the ability of African nations to raise the necessary finance to deliver broader social improvements for their populations and respond to climate change.
China did not cause African debt distress in most cases, but it is key to finding a solution. Despite growing political and economic tensions, China and the West have a strong mutual interest in cooperating with each other, and with African nations and institutions, to tackle the challenge of debt distress.
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