China is killing Africa with debt
And colonizing it
Country by Country
This China Uncensored.
I’m Chris Chappell.
Have you ever borrowed money—
say, for school, or a shipping port—
but struggled to pay it back?
And then your loan shark,
I mean, lender was like
“Ok, no problem.
Just give me the rights to everything you earn
for the next 99 years.”
I think we can all relate.
And so can a lot of countries who’ve borrowed money from China.
It’s called “debt-trap diplomacy”.
Just ask Sri Lanka, a small island nation off the coast of India.
In 2010, they got a small 1.5 billion dollar Chinese loan
to build a giant shipping port in the town of Hambantota.
But there wasn’t much shipping traffic,
which meant not much cashflow.
Sri Lanka missed a few payments and,
next thing you know,
they had to sign away the entire port to China
with a 99-year lease.
But it’s not always easy to learn from others’ mistakes.
In Africa, dozens of countries have taken out Chinese loans.
And last September,
China pledged to invest another 60 billion dollars in Africa.
“China and Africa will join hands to build
a China-Africa community with shared future
that features win-win cooperation,
happiness for all,
and harmonious coexistence.”
Of course, Xi Jinping’s definition of win-win is that,
if the country can pay off the loan,
China wins.
If they can’t,
China takes over its assets instead,
and China still wins.
So, win-win.
So which African countries are most at risk of,
shall we call it,
“getting Sri Lanka’d”?
Well, here are the five African countries
with the most debt to China.
Number 5
Sudan.
Sudan was first country in sub-saharan Africa
to recognize the People’s Republic of China.
That was back in 1959.
The Diplomat calls it China's original foothold.
Which should not be confused with the original Footloose.
You can tell the difference because Footloose had Kevin Bacon,
and Sudan had...genocide.
Sudan is a conflict-torn country that holds the record
for the longest-running civil war in Africa,
resulting in the deaths of 2 million people
and the breakup of the country into Sudan and South Sudan.
Here’s Sudan’s leader Omar al-Bashir
at the recent China-Africa summit in Beijing.
Bashir’s name might sound familiar because of...
all the war crimes he committed in Darfur.
Allegedly.
But things are looking up for Sudan,
since it’s set to get the largest share of that 60 billion dollars
Xi Jinping pledged Africa back in September.
Chinese investment in Sudan has given China
control of around 75% of the country’s oil industry,
under supervision of the China National Petroleum Corporation (CNPC).
Although some of the facilities are fixer-uppers.
Some of that Chinese money was used
to upgrade the Khartoum Refinery
and double production to 100,000 barrels a day.
Which is important.
Because the vast majority of that oil goes to China.
And there are plenty of other resources to tap in Sudan, too.
Like gold.
And loyalty.
Sudan’s estimated debt to China is now $6.4 billion dollars.
And with China’s pledge to provide more financing,
that debt could balloon big time.
According to this IMF report,
“Sudan’s external debt is assessed to be unsustainable.”
But that’s not even so bad,
compared to several other countries, including...
Number 4
The Republic of the Congo.
Not to be confused with the Democratic Republic of the Congo,
its larger and less democratic neighbor.
The Republic of the Congo owes China 7.3 billion dollars.
“China and Congo have launched projects
worth several billion dollars.
These include a motorway between Brazzaville
and the economic capital of Pointe Noire,
the construction of Brazzaville Stadium,
a hydro-electric dam,
and upgrades to the country’s airport.”
According to a paper by the China-Africa Research Initiative,
the Republic of the Congo is one of three African countries—
alongside Zambia and Djibouti—
where Chinese loans make up
“the most significant contributor to high risk of debt distress.”
So what does this Chinese debt mean?
It’s a growing amount,
we don’t know the conditions,
and these countries are going to be increasingly leveraged
to repay that when they are unable,
China will make additional demands,
these countries will have less money
to spend on social services and other programs,
it’s somewhat of a downward spiral.”
The mere thought of those “additional demands”
are making Congo’s president break out in a sweat.
Some of the projects there have raised eyebrows,
like when Chinese companies built
the new Congolese parliament building.
For free!
Maybe it’s so they can make sure the offices
are set up just the way they like it
when Congo defaults on its debts
and Chinese officials move in and take over.
No, I’m just kidding.
The Chinese regime doesn’t want to take over.
It’s more likely that they built the parliament building
so they could bug the whole thing.
Like they did with the African Union building.
More about that in a few minutes.
According to the IMF,
Congo is officially in debt distress
and they’ve been shopping around for a bailout.
But it’s not going to be easy.
When the IMF did some due diligence,
they found the Republic of the Congo
may be hiding part of its debt.
The the country claims its debt to GDP ratio is 77% of GDP.
But the IMF calculated that ratio to be 117%.
They accused the government of lying,
and called for an anti-corruption watchdog
to be set up before they agree to release any funds.
But I have a better idea,
one that won’t require Congo to clean up its corruption.
Congo is a major oil producer,
so maybe China will agree to take oil as collateral...
and then lend them some more money.
It’ll be win-win.
For China.
Number 3
Kenya
Home of the famous Maasai warriors.
“Kenya's Maasai warriors may have used spears like these
to hunt wild animals in the past.
But now they're using them to take part in Maasai olympics.”
In the past young Maasai men proved themselves by killing lions.
But now, with its debt to China at nearly 8 billion dollars,
the Maasai are instead hunting for cash.
More money, fewer dead lions.
Win-win.
But not all Kenyans feel like they’re winning.
There are reports of disgruntled travelers
on a new 3.5 billion dollar railway,
built and funded by China.
“Customers complain tickets can be bought one-way only
and just 3 days in advance.”
The 290-mile Nairobi-Mombasa railway
is Kenya’s biggest infrastructure project
since the country became independent in 1964.
It’s catchy slogan with Chinese characteristics is:
“Connecting Nations.
Prospering People.”
Kenya’s president loves his train set so much,
that he recently secured another 3.6 billion dollar loan from China
to extend the railway line by 155 miles.
Opposition parties say the project is too expensive,
won’t generate enough revenue,
and is a ticking financial time bomb.
Because after a 10-year grace period,
Kenya has to start paying back the loan.
But Kenya’s president isn’t worried.
Because that’ll be the next president’s problem.
Number 2
Ethiopia.
Ethiopia owes China an estimated 13.5 billion dollars.
But don’t worry.
China’s ambassador says by lending all this cash,
China is not only helping Ethiopia,
but the entire world.
“China sometimes feels lonely,
because we are one of the biggest,
and the only country that has invested heavily
in the development of infrastructure in this country,
because we believe finally the development of infrastructure
has not only served the local people,
the host country,
it has also served the investors from other countries.”
How selfless.
Chinese money and Chinese workers built Ethiopia
a rail link to neighboring Djibouti,
and a system of trams in Ethiopia’s capital,
Addis Ababa.
“It’s good they’re building the tram
to reduce the traffic jams in the city.
With regard to quality,
I think the Chinese did an ok job.
Still, it might have been better to give it to a Western company.”
Well, at least the quality is ok.
Not as high tech as the African Union headquarters
China built in Ethiopia, though.
That building is so advanced,
it was able to spy on people inside and transmit
confidential data to Shanghai each day for 5 years.
In China’s defense,
it was a feature,
not a bug.
And...
Number 1
Angola.
It’s the African country with the most debt to China:
$25 billion dollars.
To rack up that kind of debt,
it took more than a few one-off projects.
In Angola, Chinese companies and Chinese loans
are building entire cities.
Like the city of Zongo,
on the outskirts of the capital.
“The multi-million dollar city is being fully-funded
by the China International Fund Limited.
It will hand over the project to the government upon completion.”
Yes, it will definitely hand it over to the Angolan government.
Because it’s the right thing to do.
Incidentally, that China International Fund Limited
has shady links to the Chinese regime,
and a history of investing in unstable African dictatorships,
all the while securing rights to extract minerals and other resources.
Chinese companies are also using debt
to finance what will become the biggest airport
in a city you’ve never heard of:
Luanda.
Luanda is Angola’s capital,
but it probably doesn’t need an airport as big as the one in Cairo,
a city you’ve definitely heard of.
Especially when it costs nearly 4 billion dollars,
and is several years behind schedule.
On the plus side,
the construction is creating jobs in a country
where the unemployment rate is 20%.
The downside is,
those jobs are being done
almost exclusively by Chinese workers.
And let’s just say locals are not happy.
Maybe this isn’t a win-win.
So what do you think about African countries
being so highly indebted to China?
Leave your comments below.
And before we go,
it’s time to answer a question from a fan
who supports China Uncensored
on the crowd funding website Patreon.
David Michael White asks
“Chris, I know that it's been awhile
since you have been in South Korea
but what was the best part of your trip there?”
Good question, David.
Matt and I went to South Korea in February 2016—
where we explored traditional Korean clothing...
Traditional Korean dancing...
And traditional Korean fried chicken.
But the best part of our trip
was definitely going to border with North Korea.
We almost didn’t make it.
We has asked our Korean guide to drive us,
but they wouldn’t let us in, because—
and this is actually the reason—
because he was Korean.
Apparently, locals are too big of a risk
unless they’ve gotten special permission.
Anyway, we didn’t get in
and we had to fly home the next day.
But before we left,
Shelley explained to me over the phone that,
you know, it is possible to change plane tickets.
Which we did.
And two days later,
we signed a waiver acknowledging
that we accept the risk of being shot at any time,
and we stepped over the line into North Korea.
“So what country are we in right now?”
“Think about it.
We crossed the border line.
North Korea.
North Korea this side.”
That was a fun trip.
Thanks for your question, David.
And thank you for watching.
Be like David and support China Uncensored
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Thanks for watching China Uncensored.
I’m Chris Chappell.
See you next time.