Chinese funding to Angola is an example of “transparency”, says US researcher

3 June 2019

Funding from China to African countries has provided mutual benefits, with Angola being an example of “transparency” in the granting of capital, said US researcher Deborah Bräutigam.

The researcher said in a recent interview with the Brookings Institution that for countries like Angola, Sudan and Ghana, which have been granted Chinese credit in return for natural resources, these guarantees allow for lower interest rates and this is, therefore, a model that “can work, as the Chinese say, in a relationship of mutual gain.”

In Angola, which, according to Bräutigam, has already received funding of over US$30 billion from China, backed by oil, it is possible to “know what happens to Chinese loans, because the Ministry of Finance is actually transparent,” publishing “lists of all these projects on its website”

The researcher, who has researches Chinese loans in Africa, added that this situation contrasts favourably with the relationship, for example, with the United States, which pays directly for all the oil it buys from Angola, so it is not possible to know what happens to the money.”

In the case of China, she says, “we can see that all these oil-backed loans are seeing a return and are paying for infrastructure built in Angola,” which “is not a bad idea,” as it is a restriction to the Angolan government, because it applies part of its oil revenues to development projects.

Professor of Political Economy and director of the China Africa Research Initiative at the School of Advanced International Studies of Johns Hopkins University, Bräutigam denies the idea that the funding is leveraged by the Chinese government to gain political influence.

“Angola is the country that has received the most loans from China (in Africa) and, once again, we do not see any particular strategic, military or political influence that China is taking from these loans,” she said.

“I believe that the China Export and Import Bank has so far provided funding for 1,800 ‘Belt and Road’ projects, so trying to coordinate this as a sort of conspiracy to borrow from these countries and then use that debt to gain influence seems to be a bit far-fetched,” she said.

At the 2nd Forum for China-Africa Cooperation, the number of African countries joining the “Belt and Road” initiative has increased to 37, with Bräutigam stating that this decision is due to the countries’ interest in maintaining and extending ties with China. (Macauhub)