Does Africa have the need to continuously borrow money from China for today’s survival while creating debt-burden the next generations? The simplest answer that can be given is “it depends”, – but on what?
In conventional economic theories, we are told that when a government prints money, it exposes itself to inflation because there will be more money in the system to chase fewer goods, causing the money to lose its value.
However, if we can think beyond these theories, and accept the fact that these theories were developed by humans; individuals with brain capacities same as ours and we also have the capacity to device alternative models to solve our own problems, then, we can start to ask questions like: How can there be fewer goods in the system if the money printed is used as an incentive for innovation and production rather than serving as an object for demanding goods and services?; what is the central duty of a sovereign government when it prints paper and calls it money? What are the fundamental differences between monies printed into an economy and those borrowed into the same economy? Questions of these kinds can help us probe deeper to understand the system that controls us better.
Debt Acceleration was the Plan
China is smart and deliberate about its policy in Africa. It understands the development deficit on the continent and it is strategically using this to keep Africa’s economic future under its arms.
Africa has what China needs to further propel its economy, specifically crude oil and copper. The best way to ensure an abundant supply of these in the future would be to make the depository countries owe it, which it has excellently done so far.
The play is simple. Give staggering loans to inept leaders and keep the details of repayment from the prying eyes of the public. Eventually, if debtors are unable to service their debts, China takes over its collateral which is mostly in national assets. But this does not comprehend the severity of the situation Africa finds itself.
Reports show that a substantial number of African countries has taken Chinese loans since 2000, totaling a whopping $124 billion by 2016. Of course, there have been more after that. But, Africa is only a victim of its own ignorance as the world had severally warned of China’s end goal.
12years Ago, the International Monetary Fund (IMF) and the United States advised African leaders of the imperial intentions of China. A core of the Belt and Road Initiative developed by President Xi Jinping in 2013. However, the lack of thought and foresight by African leaders will not let them vet the deal thoroughly before putting ink on paper.
However, China has made its intentions to dominate the global economy clear enough for any serious mind to realize. It knows the enormous potentials Africa possesses, and it will go the extra length to utilize them for its selfish mission. Just like Europe did with colonialism.
If African countries should make themselves the stepping stones for China and worse-off afterward, the consequences would be theirs to bear, alone.
3days today we published an article on why the Tanzania President cancels US$10billion Chinese loan and refers to the terms and conditions as one that can only be accepted by mad people.