China’s Debt Diplomacy Threatens African Countries, Including Ethiopia

China’s debt diplomacy is posing a threat to the natural assets and sovereignty of African countries, including Ethiopia.

Between 2000 and 2020, China lent $59.87 billion to African nations, with Ethiopia owing $13.7 billion.

Rising interest rates and weakened currencies have exacerbated debt servicing challenges.

Researchers at Chatham House warn that China may seize significant native assets such as ports, railways, or power networks in response to defaults.

The lack of transparency in loan agreements and higher interest rates compared to Western sources further compound the issue, with half of China’s lending to African countries unreported in official debt statistics.

Source: Vanguard