Examining the sustainability of African debt owed to China in the context of debt-trap diplomacy

Mutai, Noah Cheruiyot; Cuong, Nguyen Manh; Dervishaj, Valdrin; Kiarie, Joyce Wangui; Misango, Peter; Ibeh, Lawrence; Popoola, Olufunke Mercy; Lallmahamood, Muniruddeen

doi:10.1016/j.sciaf.2024.e02164

Cited by 1 publication

(2 citation statements)

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“…China has emerged as a crucial player in the SSA region’s economic development, spending $ 160 billion across 1,188 loan contracts. China has formed itself as the SSA region’s leading bilateral partner, supporting fundamental financial support for infrastructure and economic development programmes [ 85 ]. The dynamic relationship between CL, IMF support, and governance structures in the SSA region highlights the complex challenges and opportunities facing indebted nations.…”

Section: Hypotheses and Resultsmentioning

confidence: 99%

“…From 2000 to 2020, China provided 1188 loan agreements totalling $160 billion to numerous African governments, with primary beneficiaries including countries such as Angola, Ethiopia, Zambia, Nigeria, the Republic of Congo, and Ghana. Chinese loans in Africa have primarily focused on the transport, power, and mining sectors, while also playing a critical role in African resource extraction operations, including mineral oils and gas, contributing to the expansion of these resource allocation sectors to promote economic growth [ 84 , 85 ]. In navigating the evolving relationship with China, SSA nations are seeking to strike a balance between protecting their economic autonomy and leveraging the benefits of Chinese investments, for sustainable development outcomes.…”

Section: Literature Reviewmentioning

confidence: 99%

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Factors influencing IMF assistance in the Sub-Saharan African region

Abeywickrama,

Perera,

Samarathunga

et al. 2024

PLoS ONE

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This study examines the determinants influencing the likelihood of Sub-Saharan African (SSA) countries seeking assistance from the International Monetary Fund (IMF). The IMF, as a global institution, aims to promote sustainable growth and prosperity among its member countries by supporting economic strategies that foster financial stability and collaboration in monetary affairs. Utilising panel-probit regression, this study analyses data from thirty-nine SSA countries spanning from 2000 to 2022, focusing on twelve factors: Current Account Balance (CAB), inflation, corruption, General Government Net Lending and Borrowing (GGNLB), General Government Gross Debt (GGGD), Gross Domestic Product Growth (GDPG), United Nations Security Council (UNSC) involvement, regime types (Closed Autocracy, Electoral Democracy, Electoral Autocracy, Liberal Democracy) and China Loan. The results indicate that corruption and GDP growth rate have the most significant influence on the likelihood of SSA countries seeking IMF assistance. Conversely, factors such as CAB, UNSC involvement, LD and inflation show inconsequential effects. Notable, countries like Sudan, Burundi, and Guinea consistently rank high in seeking IMF assistance over various time frames within the observed period. Sudan emerges with a probability of more than 44% in seeking IMF assistance, holding the highest ranking. Study emphasises the importance of understanding SSA region rankings and the variability of variables for policymakers, investors, and international organisations to effectively address economic challenges and provide financial assistance.

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Section: Hypotheses and Resultsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%