China Loans to Africa – Trojan Horse in Making? – By Emeka Chiakwelu

Posted by admin Africa & World Politics, Articles, Columnists, Emeka Chiakwelu, NNP Columnists Saturday, September 15th, 2018

By Emeka Chiakwelu | NNP | Sept. 15, 2018 – The rising China Empire is expanding and dominating global trade and commerce at a pace that is mind-blowing and voracious that made in China products have become ubiquitous in all the four corners of the world.

China is neither in charity business nor altruistic but in making maximum deals with highest returns on her investments. One thing that is desirable about capitalism is its reciprocal benefits. The players including money managers, venture capitalist, manufacturers, middle people and final consumers are getting something in return. China cannot be blamed for making profits because other participants and players on the world stage must be responsible for their actions and decisions.

It cannot be denied that the rise of China is good for the world especially Africa that developed nations have taken for granted. The international financial agencies including IMF have set up standard and conditions that Africa cannot unravel. Therefore the presence of China renders Africa the ample opportunity to make a rational choice. But that does not mean that China is more benevolent than any other, therefore the rationalization in certain corners that China is wonderful without sin is borne out of naivety and sophomoric tendencies.

African countries must realize that loans are not gifts to be kept and spent without accountability and ramification. These loans African countries are scrambling from China must be paid back. Therefore it is intrinsic that Africa saddled with over $200 billion debt must be extremely careful not be swallowed by Chinese debt. The debt trap is real and it becomes a reality when a borrower cannot live up to the criteria of the outstanding loans, interest rates and arrears. This is not a secret or something to whisper, when it comes to matters of money, African countries tend to be frivolous, clueless, careless and at worst money imbibers who mismanage commonwealth at the highest order.

Chinese Loans to Africa

China have pledged and extended billions of dollars for many African countries to borrow. At the recent China-Africa summit in Beijing, China doled out $60 billion loan for Africa. I do not have the opportunity to review the package and procedure for the borrowing and payment. But I believed that China knows precisely what it wants to accomplished. For China the loans may be means to an end, probably to plant their feet firmly on African soil. There is nothing wrong with that provided that African countries have a pre-plan objective not willfully showing up without doing their homework.

Questions For Africa

What is Africa’s modus operandi? Is this a loan trap? How is Africa going to invest the borrowed money and most importantly how to pay it back?

Asking these questions are as important as answering them. Africa must make sure that this golden opportunity that China presented to them must be seized and be transformed into a coin of mutual benefits for Africa and China. The amity between Africa and China that rooted on trade must be expanded to include educational, health and technological arrangements that can make Africa a better place.

I rejected the augment by the naysayers that the loans offered to Africa by China is to trap Africa in debt. They called it “loan trap diplomacy” and suggested that the loans will eventually trap Africa in debt; conversely African countries will be unable to pay back. When that time comes as they propounded, China will devour Africa natural resources and Africa will be re-colonized. This is being extreme in judgment in order to engineer fear in African mind and make them have cold feet on China. Notwithstanding, Africa must have a plan and be vigilant as an old Igbo saying goes, “Nobody tells the deaf that the battle have started.”

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Emeka Chiakwelu, Principal Policy Strategist at AFRIPOL. His works have appeared in Wall Street Journal, Huffington Post, Forbes and many other important journals around the world. His writings have also been cited in many economic books, publications and many institutions of higher learning including Harvard Education and Oxford University. Africa Political & Economic Strategic Center (AFRIPOL) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa. [email protected]

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