Nigeria, other African countries in trouble as China slows down lending

Nigeria and other African countries feel trapped in China's debt circle after the Asian country began reluctance to further lend financial help to them.

Diplomatic experts describe the move as a troubling trend.

Analysts worried over China's latest move

Global chief economist at Renaissance Capital Limited, Charles Robertson, explained that China's rolling back on loans would thaw growth in Africa and cannot be allowed by most investors.

The development comes amid the worsening growth rate in Africa, predicted by the World Bank to be at 3.3 per cent in 2022, down from the initial forecast of 3.6 per cent in April, mostly due to the slowing growth rate and Russia's invasion of Ukraine.

Africa was just 25 per cent of countries at high risk of debt distress and surged to 60 per cent.

Reports said that the German insurance giant, Allianz, had predicted that in the next 10 years, China might longer be interested in providing Africa with the same amount of financial assistance such as loans, investments, and trades as before.

The 2020 report by Allianz said China's share of debt owed to G20 nations spiked from 45 per cent in 2013 to 63 per cent towards the end of 2019.

China has invested heavily in foreign countries to secure supply and promote exports. The country also buys half of the world's raw materials.

Nigeria emerges as of the top debtor to China

Nigeria's debt to China accounts for 83.57 per cent of its bilateral debt as of June 30, 2022. This brings the total debt owed by the West African country to China to about $3.9 billion, data from Debt Management Office (DMO) said.

In the last decade, the top 10 African countries' recipients of Chinese loans were Angola, Ethiopia, Zambia, Kenya, Egypt, Nigeria, Cameroon, South Africa, Congo DRC, and Ghana, Boston University Global Development Centre data said.

Analysts have accused China of destroying the lives of millions of Africans who depend on it for their countries' infrastructural and overall development.