Debt Trap? Chinese Loans and Africa's Development Options
Africa’s growing public debt has sparked a renewed global debate about debt sustainability on the continent. This is largely owing to the emergence of China as a major financier of African infrastructure, resulting in a narrative that China is using debt to gain geopolitical leverage by trapping poor countries in unsustainable loans. This policy insight uses data on African debt to interrogate this notion. It explains why African debt is rising and why Chinese loans are particularly attractive from the viewpoint of African governments. It concludes that the debt trap narrative underestimates the decision-making power of African governments. However, there are important caveats for African governments. These include the impact of China’s Belt and Road Initiative (BRI) on African development agendas, the possible impact of spiralling debt on African sovereignty, and the complex impact of corruption.