Is Zambia Africa’s first casualty in China’s takeover after defaulting on loan repayment?

Is Zambia Africa’s first casualty in China’s takeover after defaulting on loan repayment?

Is Zambia Africa’s first casualty in China’s takeover after defaulting on loan repayment?

Zambia’s power company’s ZESCO is set to be among the first casualties of China’s takeover after default on loan repayment, a report indicates.

The report by Africa Confidential, titled Bills, Bonds and even Bigger Debts claims that Zambia is in talks with China over a possible takeover of the electricity company.  The report also says that the national broadcaster ZNBC is already owned and run by China.

“A major worry of the IMF and US is that China’s BRI strategy is first to encourage indebtedness, and then to take over strategic national assets when debtors default on repayments. The state electricity company ZESCO is already in talks about a takeover by a Chinese company, AC has learned. The state- owned TV and radio news channel ZNBC is already Chinese-owned. The long-term outcome could be effective Chinese ownership of the commanding heights of the economy and potentially the biggest loss of national sovereignty since independence.”

Zambia is one of the African nations that was in China earlier this week for the China-Africa summit and President Edgar Lungu is reported to have gone back home after visiting a number of Chinese companies and after receiving a grant of $30m for the Lusaka East Multi-facility Economic Zone electrification project.

The Africa Confidential report also indicates that a number of projects in Zambia are financed by China even though the amount of debt has been piling over the years.

“Since President Edgar Lungu came to power, Zambia has signed off on at least US$8 billion in Chinese project finance. Over $5 bn. of this has not been added to the total because Zambia insists the money has not been disbursed, and more large loans are in the pipeline. Yet the finance ministry does not have the capacity, insiders say, to police, let alone stem, all the spending. In some cases, the financial penalties for halting disbursement on projects would outweigh the savings. Donor governments have offered technical assistance to bring the project debt mountain under control but have been rebuffed.”

 

However, Zambia’s minister of energy,  Mathews Nkhuwa, has come out to rubbish the report, stating that such a sale would not go through because it must be vetted by the cabinet. He further added that the company is a national asset with a massive valuation and cannot be sold.

“There is no such decision by Cabinet. As you know ZESCO is such a huge company and anything to do with it will have to be decided by Cabinet and I can confirm to you that there has not been anything decided on the future of ZESCO,” Mr Nkhuwa said.

China has been considered a good partner by many African governments, however, concerns have been on the rise in regards to increasing debt and treatment of Africans by the Chinese. In Kenya, revelations of racism at the China-funded standard gauge railway not only shocked many but also uncovered a series issues that African governments need to address.

Western countries have also raised concerns over Africa’s debt to China, but it has not stopped them from presenting their own loans and projects to the countries if the recent visits by western leaders are anything to go by.

 

Share this post

COMMENTS

WORDPRESS: 10
  • comment-avatar
    Mwamba chitalu 2 weeks ago

    This president has no vision and I think its better for him to step down he has done a lot of harm to the economy of the country and subjecting its citizens to perpetual agony.his leadership is fraudrant.amassing wealth in a short period of time.ama one sided deals yalifula “old habits die hard and you can’t teach an old dog new tricks”.

  • comment-avatar
    maloza 2 weeks ago

    Vipuba va gulisa ziko ku tuna chinese

  • comment-avatar

    What’s up with the Zambian flag having a BLUE background instead of GREEN? Is this a confirmation of the Sino-Zambian flag with the Chinese calling the shots? Was this a test for Lungu and his cadres?

  • comment-avatar
    Arthur 3 weeks ago

    Indeed Zambia is one the African Countries faaling as victims of China’s exploitation. who said we are not being colonised?This is the evidence of Neo-colonialism

  • comment-avatar
    samlindo 3 weeks ago

    BLIND PRESIDENT

  • comment-avatar
    J. Lungu 3 weeks ago

    why the loads form the former western colonist master are always praised and welcomed? As a sovereign country, what is wrong for us to get loans with much more preferencial conditions from China than western countries or western controlled institution? why we should always been denied for the opportunity for better infrastructure and decent life by the western powers. Do not always try to fool us, let the people judge.

  • comment-avatar
    CHINESE AMBASSADOR 3 weeks ago

    kikikikiki that’s why we have over-loaded Zambia with our condoms now I hear they are too short for Zambian men who have big, long dicks unlike us with short ones

  • comment-avatar
    Senior Citizen 3 weeks ago

    In the absence of information, speculations thrive. Let them not just rubbish reports, we need to be guided on what strategies they have put in place to pull us out of this debt crisis black hole.

  • comment-avatar
    Kalok 3 weeks ago

    Our leaders’ recklessness is as if they will be on another planet when the crunch comes. Take care of everyone so that you are comfortable after you leave power…

  • comment-avatar

    Chinese are in Africa not because they love Africans, rather they are here because of business opportunities which we locals can’t see. If we can see them, we just watch because we have no capacity to do anything about them.