Since 2000, the outstanding debt of African countries to the People’s Republic of China amounts to 170.1 billion USD. Large African economies are among the most indebted countries. Burundi owes China more than 158 million USD directed towards telecommunications and economic cooperation. Analysis.
Among the funds loaned by China to Burundi, USD 31.5 million was intended to purchase an MA60 aircraft
According to data collected by the Boston University Research Center (United States) Global Development Policy Center, African countries showed dynamism in contracting loans from China between 2000 and 2022. Almost all African countries are beneficiaries of Chinese loans which peak at 170.1 billion USD.
Angola tops China’s creditors with 45 billion USD. It is followed by Ethiopia and Zambia which respectively total 14.1 billion USD and 9.1 billion USD in loans.
What about East African countries?
Among the East African Community (EAC) countries, Kenya occupies the first position, as it borrowed USD 9.7 billion from China followed by Uganda with USD 3.7 billion. In third place comes Tanzania which borrowed 2.4 billion USD from China. It is followed by the Democratic Republic of Congo (DRC) which owes China 2.3 billion USD.
At the bottom of the ranking are Rwanda, South Sudan and Burundi which borrowed USD 659.7 million, USD 406.8 million and USD 158.2 million from China respectively.
A debt oriented towards ICT
According to this study, Burundi contracted 9 loans from China totaling 158.2 million USD between 2008 and 2017. The country contacted credits largely from the Chinese International Development Cooperation Agency (CIDCA) and of the Export-Import Bank of China (CHEXIM).
Three loans were channeled into the field of Information and Communication Technologies (ICT) with an envelope of 77.6 million USD. As for the allocation of these funds, 15 million USD granted by the CHEXIM bank were used to install 220 km of optical fiber in the Bujumbura Telecom network in 2014. Three years later, the country is relaunching the digitalization process. Thus, the government of Burundi took out a credit of 32.6 million USD from the Chinese bank EXPORT-IMPORT BANK. The repayment of this credit will be made over a period of 25 years, at an interest rate of 2% with a 5-year grace period. So far, the project has not come to fruition.
Funds borrowed by Burundi from China
Year
Domaine d’intervention
Amount in millions of USD
2008
Transport
2,9
2009
Unknown
7,3
2011
Unknown
31
2012
Unknown
7,9
2013
Transport
31,5
2014
TIC
15
2017
TIC
62,6
Total
158,2
An odious debt
In 2017, the national telecommunications company started the project to extend and modernize its Onamob mobile network. This involves replacing all the antennas with other third and fourth generation antennas (3G and 4G) with the technical support of the Chinese telecoms giant Huawei Technologies Co., Ltd. The number of relay antennas was to increase from 51 to 150. According to forecasts, the increase in the number of antennas should improve the quality of services.
Thus, the government received a loan of 30 million USD from Exim-bank so that Onatel could evolve in the same way as other telecoms companies. The debt repayment term is 10 years and the grace period is three years. Paradoxically, the financial crisis drags on and Onatel remains only a shadow of itself.
Still talking about outstanding debt to China, Burundi took out four loans totaling USD 46.2 million between 2009 and 2012. However, these funds were channeled into unspecified areas under the label of economic cooperation and technical.
What about reimbursement of amounts due?
Last December, during the analysis of the draft revision of the law governing the management of public debt, the deputies denounced the poor management of debts transferred to specialized institutions. They gave the example of the project to create the Société Nationale de Télédiffusion Numérique du Burundi (STNB) for the digitization of RTNB or even Onatel which is on the verge of bankruptcy. Some deputies drive the point home and incriminate the managers of public companies who misappropriate the purpose of the credit. For them, these funds end up in the pockets of a few individuals and the burden of repayment falls on the entire population, they criticize.
On the continent, it is important to note that the loan amounts in the database on African borrowing from China do not correspond to the debt of African governments. This is because this database tracks commitments and not repayments, disbursements or defaults. Experts warn of financial dependence on China. Even though China is not the primary cause of Africa’s debt crisis, the lack of transparency, the impact of its contracts on local industries and the absence of collective restructuring options in their clauses raise concerns. many concerns.
