‘Debt Trap Diplomacy’ in Africa: Aid or Exploitation?

In September 2024, Beijing hosted the ninth China-Africa Cooperation Forum, bringing together 51 African leaders as President Xi Jinping pledged $50.7 billion in loans, investments, and aid to the continent over the next three years. China’s expanding presence and influence in Africa are increasingly evident, particularly in infrastructure, as she prepares to finance the world’s longest heated pipeline in East Africa. These investments have stirred considerable controversy. With the World Bank already deeming seven African countries to be in or at risk of debt distress, China’s growing attraction to Africa invites further scrutiny. Is this an opportunity for deeper diplomatic relations, or do  these investments serve as strategic tools for entangling nations in what some call ‘debt-trap diplomacy’?

Debt trap diplomacy, a strategy associated with China’s lending practices, involves extending unsustainable loans for infrastructure projects to economically vulnerable nations. When these countries inevitably struggle to repay their debts, Beijing can seize the strategic assets, thereby effectively extending its geopolitical and/or military reach. As of 2022, China was the largest official creditor, with its companies playing a dominant role in Africa’s construction sector, accounting for 60% of the total value of construction projects across the continent. 

Despite consistent criticism, some argue that Chinese investment is rooted in purely economic considerations, as Africa presents a lucrative market. The African Continental Free Trade Area, in particular, creates opportunities for cross-border value chains, which allows production to span multiple countries in Africa rather than being limited to individual nations. Additionally, the People’s Bank of China has signed agreements with countries such as Nigeria, South Africa and Egypt to  facilitate transactions in Renminbi, aiming to expand its global influence and potentially challenge the dominance of the US dollar. Furthermore, beyond economic interests, China sees strategic and diplomatic opportunities in Africa. On top of having a ‘non-interference policy’ in domestic affairs, deepening diplomatic ties  positions China as a major player, particularly in the UN, where Africa, as the largest regional bloc, can provide unparalleled support in key votes. So, arguably, China’s investments in Africa could be driven by economic, strategic, and diplomatic pragmatism rather than the intention of a ‘debt trap diplomacy.’

Yet, arguments in favour of ‘debt trap diplomacy’ remain plausible, as several instances have raised valid concerns and criticism. Many African countries are heavily indebted to China, with the Republic of the Congo, Zambia, Angola, Djibouti, Kenya, and Côte d’Ivoire all facing heavy financial burdens. This raises questions about China’s motives, as they have also invested in infrastructure in certain nations with no clear economic benefit. Djibouti, for example, with a population of just one  million and limited natural resources, has received $41.4 billion of Chinese investment in infrastructure, including a port, railway, and water pipeline. Given that  Djibouti hosts China’s first overseas military base, these investments may be driven by strategic interests. Similarly, as of 2022, China stands as Kenya’s biggest bilateral creditor, following its funding of the railway project connecting  Nairobi to the coastal city of Mombasa. Kenya faces a total debt of roughly $6.83 billion, leading  organisations like Chatham House to speculate that China could seize the Mombasa port as collateral for the unpaid debt. China’s development largesse seems to have ulterior motives.

Beyond debt-trapping concerns, China’s investments in Africa have also sparked controversy due to their environmental and human rights impacts. The East African Crude Oil Pipeline, which spans Uganda across to the coast of Tanzania and is set to be the longest heated oil pipeline in the world, will be particularly environmentally damaging. Activists state it would displace thousands, destroy wetland, and contaminate water sources. China’s involvement extends beyond construction to financing, with the state-owned corporation CNOOC overseeing oil drilling, while several Chinese banks provide funding for the project. Aside from the pipeline, China has also faced criticism for exploiting children in the Democratic Republic of the Congo, as roughly 40,000 are forced to work in cobalt mines, of which at least 80% are owned by the Chinese government. Zambia is Africa’s biggest copper producer, accounting for 70% of its exports, and 88% of China’s investment there is in mining. In Mozambique, China operates illegal logging operations and pays millions a year in protection money to jihadist groups in the country’s north, fuelling the insurgency and violence. These environmental and human rights concerns raise questions about the cost of these investments, and whether economic opportunity should come at the cost of the environment.

China’s growing influence and involvement in Africa presents newfound opportunities and controversies. While their investments provide needed infrastructure and economic growth, the question of whether China is pursuing an Africa policy with debt-trapping at its core is certainly legitimate, as many are struggling to fulfil loans which were always going to be unpayable. However, the loans also provide opportunities for African prosperity with new infrastructure and trading opportunities, ultimately leaving the future of African-Chinese relations dependent on the ways in which they are able to manage their debt and diplomatic relations.

Image: Flickr/Paul Kagame

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