I’ll Tread Carefully Here: Same saddling of debt, different horse


“Same horse, different saddle” is a Persion idiom similar to an English language idiom containing “different day”.  I’m reversing it because it fits better here.

I’ll tread carefully and not draw conclusions on this post, but it should be pretty clear where this is going.


Ngozi Okonjo-Iweala of Nigeria has been named head of the World Trade Organization.  She is both the first woman and the first person from an African nation to be named head of the WTO.  On the surface, this looks like progress for women and giving African nations an equal seat at the world table.

Ngozi Okonjo-Iweala Makes History As WTO’s First African And Female Leader

Ngozi Okonjo-Iweala, a former two-time Nigerian finance minister, was appointed Monday to the be the next director-general of the World Trade Organization. She is the first African and the first woman to lead the body, which governs trade rules between nations.

“This is a very significant moment for the WTO,” David Walker, the WTO’s General Council chair, said in a statement.

Okonjo-Iweala said she was “honoured” to be selected to lead the organization, and vowed to take on global economic and health challenges brought on by the coronavirus pandemic.

But there’s another side to this story not being told in the media, and it’s a story that went untold in 2017 because the media didn’t want to tell it.

Nigeria is one of the many countries China targeted with its “belt and road” plan of world domination.  China “invests” in countries, saddles them with debts, and then either threatens to seize assets or demands to dictate the internal and foreign policy of the debtor nation.

Nigeria In Turmoil Over China’s Debt-Trap Diplomacy

Africa’s largest economy is in turmoil over the prospect of ‘losing’ its sovereignty to China over bad debts.

The Federal lawmakers of the national assembly are demanding a probe into China’s lending practices into Nigeria, in a wake of a sovereign guarantee clause in loan agreements that they consider ‘an entrapment of Chinese neo-colonial plans’.

Lawmakers fear that the clause could see Nigeria sign away its sovereignty in the event of a payment default.

The House of Representatives had attacked the government over clauses in Article 8(1) of the Commercial Loan Agreement signed between Nigeria and the Export-Import Bank of China.

In the said agreement, Nigeria stands to concede her sovereignty to China should there be a default in the repayment of the $400 million for the Nigerian National Information and Communication Technology Infrastructure Backbone phase 2 project signed in 2018.

Why is this relevant?  Because Tedros Adhanom was appointed head of the World Health Organization in July 2017.  Tedros is from Ethiopia.  And Ethiopia is, like Nigeria, stuck in China’s debt trap: “Do what we say, or we’ll seize your assets.”

Ethiopia in talks with China to ease ‘serious debt pressure’ tied to New Silk Road rail link, envoy says

Ethiopia is renegotiating billions of dollars in loans from Beijing for a railway that links the Ethiopian capital to neighbouring Djibouti, to avoid being buried by “serious” debt woes tied to China’s controversial infrastructure push, Ethiopia’s top Beijing envoy said.

But despite the increasing debt pressure on Africa’s fastest growing economy, Ethiopian ambassador to China Teshome Toga Chanaka defended the ambitious trade and infrastructure plan known as the “Belt and Road Initiative” against criticism that it is a “debt trap” for developing countries.

We all know what happened at the WHO in 2019 an 2020, how it mishandled COVID-19, and how Tedros pandered to Beijing as a local disease turned into a worldwide pandemic.

China’s Belt and Road Initiative in Africa, Debt Risk and New Dependency: The Case of Ethiopia (PDF)

There are numerous examples of the tangible manifestation of China’s policy across Africa. Some recent large-scale projects have directed the spotlight on Ethiopia, where the Chinese presence has already been overwhelming: the first modern light railway (tram) system of Sub-Saharan Africa in the capital, Addis Ababa; or the Addis–Djibouti railway connecting the landlocked country to the maritime trade routes of the Gulf of Aden and the Red Sea aiming at improving the country’s port access.

It’s not just two countries.   China holds more countries debt in other nations than the World Bank and IMF combined.  This is Table 1 from the from the University of Florida’s African Studies Quarterly, the PDF linked above:

Table 1. Maximum amount of African government external 
debt owed to different creditors

Creditor grouping        Total debt owed     % of external debt owed

China                    US$100 billion      24%
Paris Club governments   US$ 40 billion      10%
World Bank               US$ 66 billion      16%
IMF                      US$ 18 billion       4%
Other multilateral       US$ 61 billion      15%
institutions
Private sector           US$132 billion      32%
(excl. Chinese private sector) 

Total                    US$417 billion
[Figures add up to 101 percent because of rounding]

 

This is not to suggest that such practices began with China.  The US, the World Bank and International Monetary Fund have been practicing disaster capitalism for decades, using the threat of debt to force other countries to enact policies that are detrimental to themselves.

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