Be weary of your increasing debt burden – US warns Nigeria, others

Tibor Nagy, United States of America top diplomat has warned African countries to be mindful of their debt burden.

Nagy, who spoke in Pretoria, South Africa, warned that African countries owing amount they cannot pay back, not to expect being bailed out by western-sponsored debt relief.

Nagy, U.S. Assistant Secretary of State for African Affairs, said “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.

“But Africa is facing another potential debt crisis today, with around 40 percent of low-income countries in the region now in debt distress or at high risk of it, according to an IMF report released a year ago.

“We went through this, just in the last 20 years, this big debt forgiveness for a lot of African countries.

“I certainly would not be sympathetic, and I do not think my administration would be sympathetic to that kind of situation,’’ he told reporters.

Under Donald Trump’s administration, the U.S. has criticized China for pushing poor countries into debt, mainly through lending for large-scale infrastructure projects.

Nagy has warned that those nations risk losing control of strategic assets if they cannot repay the Chinese loans, NAN reports.

Sri Lanka formally handed over commercial activities in its main southern port in the town of Hambantota to a Chinese company in 2017 as part of a plan to convert $6 billion of loans that Sri Lanka owes China into equity.

From 2000 to 2016, China loaned around $125 billion to the continent, according to data from the China-Africa Research Initiative at Washington’s Johns Hopkins University School of Advanced International Studies