By Enyichukwu Enemanna
Vice President of Nigeria, Yemi Osinbajo has lauded China for its presence in Africa, which he said has reduced the urge for loans from Bretton Woods, consisting the World Bank and the International Monetary Fund (IMF).
He said China has always shown up for African countries in a way never seen, when compared with western countries, praising the investment of the Asian giant in Africa, which he said stood at $254 billion in 2021, about four times the volume of US-Africa trade.
In a statement at an event at King’s College London on March 27, 2023, Osinbajo said, “China is the largest provider of foreign direct investment, supporting hundreds of thousands of African jobs. This is roughly double the level of U.S. foreign direct investment, adding that, “China remains by far the largest lender to African countries.”
The vice president’s observation comes on the heels of the US vice president, Kamala Harris’ tour to three African nations — Ghana, Tanzania and Zambia, ignoring Nigeria.
Osinbajo observed that Chinese companies had taken the lead in exploiting minerals deposits in Africa, many now in lithium mining in Mali, Ghana, Nigeria DRC, Zimbabwe and Namibia in a bid to boost business in the continent.
He said, “Most African countries are rightly unapologetic about their close ties with China. China shows up where and when the west will not or are reluctant.”
He added, “And many African countries are of the view that the beware of the Chinese Trojan loans advise forming the west is wise but probably self-serving,” explaining that, “Africa needs the loans and the infrastructure. And China offers them. In any case, the history of loans from Western institutions is not great.”
Taking a step further, Mr. Osinbajo sent a salvo to the World Bank and the IMF, over the conditions attached to their loan facilities.
“The memory of the destructive conditionalities of the Bretton Woods loans is still fresh, and the debris is everywhere.
“And the preoccupation of western governments and media with the so-called China debt trap might well be an overreaction,” he added.
“I recommend an eye-opening lecture by Professor Deborah Brautigam about two weeks ago at Jesus College Cambridge.
“The truth, as she points out, is that all of the Chinese lendings to Africa is only 5 per cent of all outstanding public and publicly guaranteed debt in low and middle-income countries, compared to 23% held by the World Bank and other multilaterals.”
He alluded that Chinese lenders account for 12 percent of Africa’s private and public external debt.
“And the Chinese have also been there when the debts cannot be paid. In early 2020 as COVID battered African economies, China came together with other G20 members to launch the Debt Service Suspension Initiative (DSSI).
“About 73 low-income economies benefited from the suspension of principal and interest payments. Chinese banks provided 63 per cent of the total debt relief while being only owed 30 per cent of the debt service payments due,” he quipped.
