Africa and Debt Held by China

Thierry Pairault posted on 28 April 2020 a short piece in French which translates "African Debt: 40 percent or 17 Percent Chinese?"

Pairault comments that the French media have been reporting that 40 percent of Africa's external debt is owed to China while Deborah Brautigam in a 15 April 2020 piece in The Diplomat titled "Chinese Debt Relief: Fact and Fiction" is about 17 percent based on World Bank data. Pairault then explains the reasons for the different numbers.

There is a 2018 study by the Jubilee Debt Campaign, a UK-based charity focused on the connections between poverty and debt, titled "Africa's Growing Debt Crisis: Who Is the Debt Owed To?" It concluded, at the maximum, the percentage of Africa's governmental external debt owed to China is 24 percent and is, at the minimum, 18 percent. It settled on a figure of about 20 percent.

Clearly, the percentages cited in the French media are too high. But the more important point, as Pairault notes, is the impact of China's debt on individual African countries. While China holds very little or even zero debt in many of Africa's 54 countries, it holds a significant amount in others, including some that the IMF has identified in debt distress or at high risk of debt distress.

Based on my own calculations, of the six African countries in debt distress, China holds 20 percent or more of the debt for two or three of them: Mozambique (about 21 percent), Sudan (probably low 30s percentile), and possibly Zimbabwe (between 15 and 23 percent). Of the eleven countries at high risk of debt distress, China holds 20 percent or more of the debt for four: Djibouti (between 68 and 82 percent), Ethiopia (34 percent), Zambia (between 30 and 44 percent), and Cameroon (between 29 and 33 percent). In addition, China holds more than 20 percent of the external debt for several others, such as Angola (about 60 percent) and Uganda (about 25 percent), that are not in debt distress or at high risk of debt distress according to the IMF.