Finance

We won’t give you any bailout – US cautions Nigeria, other African counties against debt

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The United States’ Assistant Secretary of State for African Affairs, Tibor Nagy, has said his country will not provide any debt relief for African countries that plunge themselves into debt.

Nagy said this in Pretoria, South Africa on Monday, adding that nations risk losing control of strategic assets if they cannot repay the Chinese loans.

The International Monetary Fund and World Bank began the Heavily Indebted Poor Countries (HIPC) Initiative in 1996 to help the world’s poorest countries clear billions of dollars worth of unsustainable debt.

The IMF has again said Africa is facing another potential debt crisis today, with around 40 per cent of low-income countries in the region now in debt distress or at high risk of it.

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Nagy said: “We went through this, just in the last 20 years, this big debt forgiveness for a lot of African countries”; referring to the HIPC programme.

“I certainly would not be sympathetic, and I do not think my administration would be sympathetic to that kind of situation.”.

The US has been at loggerheads with China pushing poor countries into debt, mainly through lending for large-scale infrastructure projects.

Sri Lanka is one the recent to pay back a $6 billion loan to China with all the commercial activities in its main southern port in the town of Hambantota.

Data from the China-Africa Research Initiative at Washington’s Johns Hopkins University School of Advanced International Studies has shown that China loaned $125 billion to Africa between 2000 and 2016.

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