The size of Chinese lending, in itself, is not enough to cause African debt distress. Loans from China to Africa were declining well before Covid-19, falling from a peak of $28.4bn in 2016 to $8.2bn in 2019 and $1.9bn in 2020. According to Chatham House, Chinese loans account for only 12% of Africa’s private and public external debt.
Neither is the interest on Chinese loans a particular problem. In 2021, private lenders charged African sovereigns an average 5% interest rate, while China and multilateral lenders charged 2.7% and 1.3% respectively.
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