Amid Plunging Prices, Africa's Commodity-backed Debts to China Become Perilous

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By The China Africa Project. Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio is streamed directly from their servers. Hit the Subscribe button to track updates in Player FM, or paste the feed URL into other podcast apps.

Over the past 15 years, many African countries borrowed tens of billions of dollars from China to build badly-needed infrastructure. Short of cash, these countries instead leverage their natural resources to repay their debts. Ghanaian bauxite, Angolan oil and Zambian copper, for example, were used to generate the revenue to service these loans.

“While these loans have often provided much-needed infrastructure, such as roads and hydro-dams, in many cases they have led to crippling levels of debt and the risk of losing collateral that is itself worth more than the value of the loan,” said David Mihalyi, a senior economic analyst at the Natural Resource Governance Institute and co-author of a new report on the risks of commodity-backed loans in Africa and Latin America.

David and NRGI Guinea Country Manager Hervé Lado join Eric & Cobus this week to discuss their new report and what governments need to do to better manage the current high levels of risk.

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