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Obstacles to progress

Realities

Foreign Exchange Reserves in US $ Millions (cont.)

World Millions
Rank Movement Country US$ As of Date

189 Benin 60 December 2017
191 Burkina Faso 45 December 2017
192 São Tomé & P 47 2018
193 Somalia 32 December 2017
Source : Wikipedia 226

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Debt-Trap Diplomacy

“The rich rule over the poor and the borrower is slave to the lender.”
Proverbs 22:7

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“ Zambia's external debt, currently estimated at 35% of its GDP, has soared: according to official

figures it reached nearly $10bn in 2018, up from $1.9bn in 2011. As southern Africa's third-
largest economy and Africa's second-largest producer of copper, Zambia is a textbook case of
the Chinese debt trap that affects 15 African countries, including Djibouti and the Democratic

Republic of the Congo.”
"China Steps in as Zambia Runs out of Loan Options." 227
Jean-Christophe Servant
The Guardian (December 11, 2019)
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“ The paper examines Chinese international lending between 1949 and 2017, including both
reported and "hidden debts" (those not reported to the International Monetary Fund, World

Bank, or Bank for International Settlements), as well as the impact of hidden debt on debt
sustainability.

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African countries make up half of the top 50 nations most indebted to China as a percent of

GDP. Djibouti, Republic of the Congo, Niger, and Zambia are in the top 10.
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While the paper does not provide country-level data, it notes that hidden debts in Africa are
mostly located in resource-rich countries. Globally, the authors estimate that 50 percent of

Chinese foreign lending is not officially recorded by the World Bank's International Debt
Statistics database.
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Chinese lending is mostly at market rates whereas traditional lenders such as the multilaterals
and Paris Club members lend at concessionary rates. The tenure of Chinese loans is also

usually shorter, leading to larger annual repayment amounts.