Friday, July 5, 2019

Is China To Blame for Zambia's Looming Debt Crisis?

Norway's Chr. Michelsen Institute (CMI) published in June 2019 an excellent report titled "Zambia's Looming Debt Crisis--Is China to Blame?" by Arve Ofstad, former ambassador to Zambia, and Elling Tjonneland, senior researcher at CMI.

Zambia has borrowed heavily since 2012 and is now in high risk of debt distress. China is the single biggest creditor, but Zambia has also borrowed from others, including development banks and the commercial Eurobond market. China is accused of promoting debt trap diplomacy in Zambia. This study shows that many of the claims about Chinese take-over of major state assets are exaggerated. Yet, the concerns should not be disregarded.