Public finances

The debt toll

The poorest countries may owe less to China than previously thought

THE FOUR-LANE, 62-km toll road being built between Masiaka, a business hub in Sierra Leone, and Freetown, the country’s capital, promises shorter journey times, fewer accidents and smoother drives. It is nonetheless controversial. Awarded to China Railway Seventh Group, the project added over $160m to the country’s foreign debt, according to the China-Africa Research Initiative (CARI) at Johns Hopkins University. The work has suffered delays, which the company blames on the pandemic and the need to compensate property owners, reports the Concord Times, a local newspaper. The firm has also complained that some lorries pass by the toll booths, not through them.

Projects like these have mushroomed across Africa and other developing countries in the past 15 years. “It’s no secret...China is by far the largest bilateral creditor to African governments,” said Mike Pompeo, America’s secretary of state, earlier this month, blaming it for creating an unsustainable debt burden. Plenty else is, however, secret. China does not typically divulge how much it has lent to whom or on what terms. Nor is it a member of the Paris Club of government lenders, which tries to co-ordinate debt forgiveness among its members, making sure that no lender takes advantage of the magnanimity of another.

Many, therefore, have wondered how China would play its part in the debt-relief initiative agreed in April by the G20 group of big economies. That initiative will allow 73 of the…