The World Bank published a paper in February 2022 titled "Resource-Backed Loans in Sub-Saharan Africa" by David Mihalyi, Jyhjong Hwang, Diego Rivetti, and James Cust.
The paper looks at 30 resource-backed loans (mostly provided by China) between 2004 and 2018 to 11 countries in Sub-Saharan Africa. It concludes that while a few resource-backed loans extended by bilateral lenders have outstandingly low rates, most come with rates well above the median. When transparently conducted (often not the case), borrowing operations that leverage natural resources as credit enhancements may represent an opportunity. However, their net benefit depends on a country's debt sustainability, the use of proceeds, and the improvement in financial terms.
