The coronavirus pandemic has sparked off the first recession in 25 years in Sub-Saharan Africa, the World Bank says. Amongst other consequences, Covid-19 has ‘exacerbated public debt vulnerabilities’. Though the Paris Club was previously the sole institutional interlocutor of African states’ debt, China’s rise as a global power is proving to be a challenge. Will differences between these two powerhouses have consequences? What are the implications for the countries benefitting from China’s financial assistance?
The Covid-19-related economic crisis “has brought a significant risk of debt distress in several African countries by exacerbating vulnerabilities that have built up over the past decade”, according to a BNP Paribas paper titled ‘Dealing with Africa’s Risk of Debt Distress (2021)’.