Angola is in the top-5 countries most heavily in debt to China, according to World Bank data analysed by Statista.
Countries heavily in debt to China are mostly located in Africa, but can also be found in Central Asia, Southeast Asia and the Pacific.
As the new preferred lender to low-income countries, China held 37% of these nations’ debt in 2020. Just 24% of the countries’ bilateral debt came from the rest of the world that year, reports Statista.
Angola accelerates plan to repay USD18 billion debt to China
At the end of 2021, of the 98 countries for whom data was available, Pakistan (USD 27.4 billion of external debt to China), Angola (USD 22 billion), Ethiopia (USD 7.4 billion), Kenya (USD 7.4 billion) and Sri Lanka (USD 7.2 billion) held the biggest debts to China.
The countries with the biggest debt burdens in relative terms were Djibouti and Angola, followed by the Maldives and Laos, which opened a debt-laden railway line to China last year.
The “New Silk Road” project, which finances the construction of port, rail and land infrastructure across the globe, has created much debt to China for participating countries.
The Paris Club used to hold the majority of low-income countries’ debt before it was restructured and largely forgiven after the turn of the millennium for qualifying, developing countries. Whether such a process will be available for Chinese debt is unclear.
As of 2021, China had officially lent around USD 180bn to low and middle-income countries, up from just around USD 40bn in 2010. Chinese loans have higher interest rates than those from international institutions like the International Monetary Fund or The World Bank, or bilateral loans from Paris Club countries, and also have shorter repayment windows.
Their setup is closer to commercial loans concerning their conditions of repayment, confidentiality as well as their objectives of funding specific infrastructure projects instead of pursuing development goals in general.
The Covid-19 pandemic has complicated the already difficult repayment of Chinese loans even more.
Sri Lanka – also among China’s biggest debtors – which in 2022 was the first Asian country in two decades to default on its debt.