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Arts and Social Sciences Journal

ISSN: 2151-6200

Open Access

The Chinese Loan and its Impacts on African Economy: A Strategic Solution or a Potential Trap?

Abstract

Ghazali Bello Abubakar*

With its vast and rapidly growing economy, China has emerged as a crucial partner for countries across the globe, particularly in Africa. The Chinese African partnership extends beyond mere diplomacy, encompassing bilateral lending and development projects. Currently, certain African countries, such as Uganda, are already experiencing the adverse effects of these loans, with assets such as Entebbe International Airport being put at risk. Numerous low-income African nations are grappling with the daunting challenge of meeting their debt obligations, and this situation is likely to worsen in the years to come. This paper aims to examine the potential risks associated with the debt burden on African nations. It will also explore the challenges they may face in repaying the loans. However, it highlights some of the infrastructural developments attained through the loans. It concludes that despite a relative decline in the scale of Chinese lending to Africa between 2000 and 2020, these loans have the potential to both facilitate economic development in Africa and entangle the continent in a form of enslavement. Interdependence theory is used to discuss the findings of the paper.

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