Africa's Poverty and its Chinese Debt

The new head of the World Bank has told China that it needs to come clean about its lending to poor countries, as he warned that debt problems are once again on the increase. World Bank president, David Malpass said there were already 17 African countries at high risk of debt distress.

“That number is growing as new contracts come in and are not transparent,” he added. Malpass said debt could help countries improve their economic performance but it would be a drag on growth if not transparent.

Beijing has increased its influence in Africa by lending heavily to governments for infrastructure projects on a no-political strings basis. But both the World Bank and its sister organisation, the International Monetary Fund, are concerned about the risks of corruption and over-indebtedness.

The Jubilee Debt Campaign has calculated that debt repayments by the world’s poorest countries have doubled since 2010 and are now at their highest level since just before the write-down agreed by the G8 at the Gleneagles summit in 2005.

Malpass said the number of people in extreme poverty – living on less than $1.90 a day – was on the rise in sub-Saharan Africa.

“By 2030, nearly nine in 10 extremely poor people will be Africans, and half of the world’s poor will be living in fragile and conflict-affected settings”, he said.

https://www.theguardian.com/business/2019/apr/11/world-bank-boss-calls-for-more-transparent-lending-to-poor-nations-david-malpass