Tz owes China over $2bn and why the debt could soon get much bigger

26Sep 2018
By Financial Times Reporter
DAR ES SALAAM
Financial Times
Tz owes China over $2bn and why the debt could soon get much bigger
  • DEBT-TRAP DIPLOMACY? The biggest holders of Chinese debt in Africa are Angola ($42.8bn), Ethiopia ($13.7bn), Kenya ($9.8bn), Sudan ($6.49bn), Zambia ($6.37bn), Cameroon ($5.56bn), Nigeria ($4.8bn), South Africa ($3.78bn), and Ghana ($3.49bn).

TANZANIA owes China more than $2 billion and this debt could significantly increase over the coming months if the government secures large loans that it is still actively seeking from Beijing to finance various infrastructure projects, including the flagship standard gauge railway (SGR).

Data from the China-Africa Research Initiative (CARI) at Washington’s John Hopkins University School of Advanced International Studies, seen by the Financial Times, shows that Tanzania took loans to the tune of $2.347 billion from China in the period between 2000 and 2017.

The Chinese loans represent about 15 per cent of the central government's total external debt stock, which stood at $15.8 billion by June this year, according to latest Bank of Tanzania (BoT) data.

The single biggest disbursement of Chinese loans to Tanzania was made in 2012, when the government received a $1.192 billion injection from Beijing.

In 2013, Tanzania received another loan of $589 million from China, followed by a credit line of $200million from the Asian giant in 2015, according to data on Chinese loans to African governments compiled by CARI.

In comparison, the biggest holders of Chinese debt in Africa are Angola ($42.8bn), Ethiopia ($13.7bn), Kenya ($9.8bn), Sudan ($6.49bn), Zambia ($6.37bn), Cameroon ($5.56bn), Nigeria ($4.8bn), South Africa ($3.78bn), and Ghana ($3.49bn).

Tanzania has been unsuccessfully seeking a $7.6 billion loan from China's state-run Export-Import Bank (Exim) for the SGR project. A delegation led by the president of China's Exim Bank, Liu Liange, held discussions about this loan with President John Magufuli and senior finance ministry officials in Dar es Salaam in July 2016.

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