It appears that the promise of development and upward mobility from Chinese investment into Zambia has led to a suspicious amount of debt instead of addressing socio-economic concerns. This may negatively affect the nexus between the two countries in the long run (Asongu & Aminkeng, 2013). Very little has been published recently from reputable journals about the relationship between Zambia and China, with a specific focus on debt, however, the following news authorities have reported on the situation:
News24 (2018), maintains that the official debt in Zambia amounts to $10.6bn however, reservations have developed in recent months from allegations that the government is concealing its indebtedness. This concern is valid due the occurrence of a similar problem in Mozambique. In 2016 the Mozambican government was forced to admit that is had hidden $2bn of borrowing from the Chinese (News24, 2018).
On the contrary, the amount of debt being owed to the Chinese is claimed to be $9.4bn by Laterza & Mususa (2018). They maintain that this is the amount stipulated by the government which is up from $1.9bn at the beginning of 2012 (Laterza & Mususa, 2018). In another competing article (Mapenzauswa, 2018) the amount of debt owed to China is said to be nearly US$10bn. This indicates that 1) there is a significant amount of debt owed to the Chinese by Zambia but 2) that there is little to no consensus on the actual amount that is owed to the Chinese. With China as the main investor in Zambia and the slump in copper prices (Zambia’s main export) there is a growing concern that Zambia is both trapped by international creditors (including the IMF) and will fall into debt default – the “biggest losers will be the Zambian people” (Laterza & Mususa, 2018) and could be followed by a chain reaction in other Sub-Saharan countries who are struggling with debt payments.
- Little to no consensus on amount of debt owed to China from Zambia
- Zambia appears to be following a similar trajectory to Mozambique in 2016
- If so, this could lead to a chain reaction of debt default in Sub-Saharan countries
Asongu, S. A., & Aminkeng, G. A. A. 2013. The economic consequences of China–Africa relations: debunking myths in the debate, Journal of Chinese Economic and Business Studies 11(4):261-277.
Laterza, V., & Mususa, P. 2018. Is China really to blame for Zambia’s debt problems? [Online]. Available: https://www.aljazeera.com/indepth/opinion/china-blame-zambia-debt-problems-181009140625090.html. [2019, January 25].
Mapenzauswa, S. 2018. Zambians are the latest Africans to chafe at China’s presence [Online]. Available: https://www.iol.co.za/business-report/opinion/zambians-are-the-latest-africans-to-chafe-at-chinas-presence-17365503. [2019, January 25].
News24. 2018. ‘Say no to China’: Anger mounts in Zambia over Beijing’s presence [Online]. Available: https://www.news24.com/Africa/News/say-no-to-china-anger-mounts-in-zambia-over-beijings-presence-20180923. [2019, January 25].