23.10.2018 Author: Phil Butler

Drowning in Debt Forever: The Fate of Africa Seems Irreversible

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Headlines this week from western mainstream media paint an Africa-China financial crisis brewing. On the contrary, Chinese and African news reveals a “win-win” financial atmosphere mostly. These conflicting “truths” prompted me to report about Africa debt, and just what the imperialist wolves are up to on the world’s most abused continent. My revelations may surprise you.

Jeff Bezos’ Washington Post reports, “African countries have started to push back against Chinese development aid,” and then writer Richard Aidoo goes on to tell us why. Over at The East African Allan Olingo assures us that “China’s not among Africa’s top creditors.” There are dozens of examples of misinformation like this, but the reality of China-Africa relations is a lot more straightforward than any of the writers, and experts care to reveal. Yes, China trade with Africa is doubling on account of the U.S. versus China trade war. It’s true, China investment in Africa is huge. But, media propaganda from Washington and London never reveals the global economic war being waged. We’re never clued in on the 21st-century imperialism I’ve preached about lately.

The western “imperialists” try and portray China as the big bad wolf about to ravage Africans, but the real opportunists there are familiar ones. Recent research by the Jubilee Debt Campaign revealed that Africa’s repayments grew to 11.9 percent in 2017, and that figure was up from 5.9 percent of total revenue in 2015. This uptick was caused by an increase in external loans to African countries from various lenders, China being one. Yes, money has been pouring into Africa the last couple of years, but China is not the biggest lending winner. While China has invested the most in Africa, $72 billion of a total of $130 billion (World Bank), the Paris Club and private lenders are taking the lion’s share of profit in interest payments. But China’s lending is altogether different from private and other investors. Here’s where the truth of the world economic conflict in Africa is revealed.

The composition of debt payments African countries make shows China’s investing in potential and for long-term financial gain, while private and institutional investment is more “high risk” by comparison. The figures from the Jubilee Debt Campaign are telling in this regard. This can be seen in the debt interest and payments. For instance, China’s interest on loans is much lower than creditors the Jubilee Debt Campaign’s Tim Jones says are “opaque deals.” According to the economist, China only owns 17% of Africa’s interest payments, while private sector interest on loans amounts to a whopping 55%. The economic expert goes on to do minute analysis, but it’s easy to see somebody is fleecing African borrowers. These “opaque” lenders are in the game as privateers, and this is the reason most of the debt being paid is from countries in crisis. The report tells us:

“Of the 16 African countries rated by the IMF as in debt distress or at high risk of being so, on average 15% of their debt is owed to China. China is therefore on average a less significant lender in debt crisis countries than across the whole continent.”

The statistics raise the question, “Why are private investors buying into crisis debt? If we refocus for a moment on Greece and other nations being sold off wholesale in privatization schemes for debt relief – we find our answer. The bigger mission for western players is to break these countries like profiteers always do. We can see from the full report here, that the private sector lending to Africa far exceeds China’s or any multinationals if all things are factored. So, our next question should be, “Who are these private lenders?”

When I pondered the structure of African debt to answer this question for you readers, it took me exactly 30 seconds to isolate the nation of Chad by looking for the biggest ratio of China and Paris Club debt versus private and institutional debt. This story from Oil Price from 2017 shows that half of Chad’s oil revenues are soaked up by none other than Glencore, the Anglo-Swiss multinational commodity trading and mining company. Next, I discovered that my previous targets here on NEO, the Bill & Melinda Gates Foundation, has invested heavily in Glencore and other fossil fuels concerns dealing in Africa. This Guardian story made me totally disgusted to find what I thought I would, so I moved on to another example.

Next, I scrolled the list of individual countries for big ratios of FDI from private investment versus China and bilateral investing. Ghana came up with nearly $5 billion in private investment to just over $2 billion by Chinese growth investment. And guess what I found in the news? Ghana’s President Nana Addo Dankwa Akufo-Addo just launched Ghana’s first-ever oil and gas licensing rounds bid evaluation and negotiation (LRBEN) at a UK-Ghana Investment Summit 2018 in Accra. As it turns out, Ghana’s debt expenditures have risen “mysteriously” to equal almost 70% of the country’s GDP in the last few months. Added to this, the fact the country’s new borrowings are being used to finance past debt that is maturing, it shows us the country is being drained by debt investors. The list goes on, but now let me make some of you really furious in my conclusion.

Is it fair to say that the promises western financiers have made to Africans have been lies these last seven decades? I think so, and if you read the bullshit that investment banks like Goldman Sachs spit out, you’ll want to give “the finger” to every privateer wringing the life out of an entire continent. Read what Colin Coleman, head of investment banking for sub-Saharan Africa at Goldman Sachs has to say about the bright economic future of the continent:

“This is going to be a continent moving from a low base into a much higher form of consumer services, much better banking, technology, and telecommunications infrastructure. And the billion people that occupy Africa are going to see tremendous improvements in their lives.”

How long have we heard this doublespeak? Let me remind Mr. Coleman of that Goldman Sachs, the World Bank, the IMF, and all the rest of the bloodsuckers have been predicting Africa’s final emergence for decades. Let me quote now from the year 2000 IMF report, “Promoting Growth in Sub-Saharan Africa: Learning What Works:”

“Africa is the world’s poorest continent. But for the first time in a generation—amid all the bad news—there is hope for change. An increasing number of countries in sub-Saharan Africa are showing signs of economic progress, reflecting the implementation of better economic policies and structural reforms. These countries have successfully cut domestic and external financial imbalances, enhancing economic efficiency.”

Maybe the Goldman Sachs geniuses of the world were misled by Washington think tanks like the Brookings Institute, which commissioned this scholarly study by Harvard’s David E. Bloom and Jeffrey D. Sachs? Their scholarly efforts ended up in a section “Evidence on African Growth from Cross-Country Growth Regressions,” it pinned Sub-Saharan Africa’s growth potential on a brilliant premise. Brilliant, I tell you. Their genius lightbulb was illuminated by how public health might affect potential:

“We are especially interested in the coefficient on life expectancy at birth (our proxy for health status), which has a strong connection with both geography and demography in Africa. Although it is not an ideal measure of health, it is widely available and often used in this context. We interpret it as capturing possible effects of health on economic growth that may operate through lower morbidity, that is, a more productive labor force; higher returns to investments in human capital, directly due to increased longevity; and increased saving at all ages for a longer period of retirement.”

In other words, “Dying Africans cannot dig those diamonds out of the ground for DeBeers.” Clearly, in Washington, London, Amsterdam, and Paris the need to feed the slaves was as apparent as the need to keep them poor. How’s that for brutal, truth analysis? Nina Munk, author of the 2013 book The Idealist: Jeffrey Sachs and the Quest to End Poverty, called the famous economist out by saying that years in the future his ideas “left people even worse off than before.” Given Sachs and many of these other economic soothsayers run colleges, advise presidents, and tell the United Nations what to think, maybe the goals of Goldman Sachs and Jeffrey (no apparent relation) are coming to fruition. Maybe this was the mission after all?

Finally, the IMF, World Bank, the UN, investors, governments, and other operators within the western imperialist mechanism have been telling us since World War I that Africa would return to Eden economically. I can find 10,000 proofs that connect these prospectives to profiteering. But when we consider what has been taken out of Africa in the last hundred years, and when we factor in how poor the people there are still, the truth in these matters is blinding. As for Chinese investment, it looks to me like the Chinese have a better idea for the future than the Paris Group, the IMF, or Bill Gates.

Phil Butler, is a policy investigator and analyst, a political scientist and expert on Eastern Europe, he’s an author of the recent bestseller “Putin’s Praetorians” and other books. He writes exclusively for the online magazine “New Eastern Outlook.”


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