China’s commitments loom large in the successful implementation of the G20’s COVID-19 Debt Service Suspension Initiative (DSSI), with Angola, Kenya, Zambia and other nations benefiting from relief sparked by the pandemic’s impacts.
Of the 46 countries that participated in the DSSI relief, China contributed 63% of debt service suspensions, while holding only 30% of all claims, according to a new report from the China Africa Research Initiative at Johns Hopkins University’s School of Advanced International Studies. Some US$ 8.2 billion in debt rescheduling came from Chinese creditors, about half of it in deals with Angola.
“The moratorium marked the first time that Beijing participated in a multilateral sovereign debt relief effort,” said Deborah Brautigam and Yufan Huang, the paper authors. “It thus has implications for a deeper understanding of China’s rise in an important area of global economic governance.”
In 2021, Chinese creditors accounted for only 5% of public and publicly guaranteed debt for all low- and middle-income countries, the report said. But “China’s heft as a creditor is greater in the low-income countries eligible for the DSSI,” the report said. For example, China’s share accounts for 17% of such debt in sub-Saharan Africa.
In addition to details on Chinese relief through the DSSI, the new paper explores why countries like Uganda and debt-stressed Malawi did not participate in the program, which was spearheaded by the International Monetary Fund (IMF) and World Bank.
The study comes amid scrutiny of how China will handle debt in Egypt and other economically distressed African nations. It follows a recent report that found China had committed $240 billion in rescue loans and other support for nations including Sudan, South Sudan, Tanzania and Kenya in recent years.
Source : AfricaTimes