Could debt relief by China have a sustained impact on Africa’s Covid-19 recovery?

 In analysis, infographic

We have been tracking African governments actions since the outbreak of the Covid-19 pandemic, and calculate that currently, African countries are spending around 2.5% of GDP to combat Covid-19’s impacts. While this is this is significantly below spending by other regions (for example the Asia Pacific region is spending 7% of GDP, and G20 countries spending 11% of GDP), set against this is a prevailing narrative that African countries owe huge debts to China, and this is impairing African countries’ abilities to address Covid-19, or indeed, to continue to function in a stable way.

While we question this narrative, there is a salient question of whether China’s debt relief efforts – from suspension to cancellation and restructuring – in the context of Covid-19 could indeed be significant, especially into the long-term? Could China actually help African countries (and other low and middle income countries) recover better from Covid-19 more broadly?

The answer is a little complex… In the short-term – yes. But long-term it depends on others – especially the IMF and bondholders… Why?

To explain why clearly and objectively, The Oxford China International Consultancy (OCIC), together with Development Reimagined, have looked at the data, conducted some innovative scenario simulations, and produced a series of infographics (download here).

Our analysis revealed five key insights.

1. Annual debt payment costs to China are higher than those to OECD governments, but below costs to multilateral banks

Total debt service for low and middle income countries in 2020 totalled USD 437bn, of which 27% was for debt owed to the Chinese government and official creditors (e.g. China Exim Bank), and 33% for debt owed to multilateral lenders. 27% in total was for debt owed to other governments and the private sector in OECD countries (i.e. including payments for “eurobonds”). The majority of debt service costs to most creditors – except for OECD governments and multilateral creditors – need to be made by African countries.

2. Debt suspension by China can help enable Covid-19 spending

While a lack of transparency from China and borrowing countries make estimates difficult, our scenario estimations suggest that overall, up to 40% of finance spent on Covid-19 so far by African countries could be covered by suspending debt payments to Chinese official creditors, and populations in some of the countries with highest debt levels to China – such as Angola, Djibouti and Zambia – could benefit the most. Moreover, further debt service cancellation in and beyond 2021 would help to continue protecting governments from the impacts of the prolonged pandemic.

3. There is precedent for China entirely cancelling debt in African countries.

In the past, over 2000-2018, China has cancelled debt for at least 20 African countries, equivalent to 1.5% of all loans taken out across Africa from China. Most cancellations have been for amounts that are less than 100m. This precedent provides some hope for further action from China in 2021 to suspend debt payments – even if they will still need to be made in future.

4. However, debt suspension by China will not necessarily change internal economic structures in African countries

A key issue going forwards beyond Covid-19 is whether countries need to drastically reduce spending or increase taxes or savings to compensate. This is what is known as reducing “fiscal pressure”. We calculate that bilateral debt suspension by China in 2020 could lead to around a 2% reduction in “fiscal pressure” across all low and middle income countries. But the impact of this varies significantly across countries, reaching over 20% for Angola, and 12% in Djibouti. In addition, effects will differ depending on which sectors the loans have been focused on – Chinese loans for different sectors have different costs, and projects in different sectors also have different effects on economic growth in the receiving countries. This means the impact of suspension will not necessarily be long-term, and therefore if “fiscal pressure” is required to be reduced further, countries need to take other actions.

5. Furthermore, efforts by China could also be dampened by actions and attitudes of other lenders to African countries

While China is a significant lender to low and middle income countries, one of the most significant challenges is one of “classification”. Many countries that arguably have the highest financial needs for infrastructure and poverty reduction, especially in Africa, appear to be disproprtionately classified by the IMF as debt distressed.

African countries also appear to be disproportionately seen as “risky” by private credit ratings agencies.

This makes African governments hesitant to even ask for debt suspensions from China or others, let alone cancellation or restructuring. Furthermore, any changes in such categories can make future loans more expensive, or even entirely stop countries from being able to access loans to support future generations. Thus, these decisions are extremely difficult.

So, what does this mean for the future, especially as Africa’s overall development finance needs continue to rise to meet poverty reduction and climate change goals?

Despite international narratives of debt distress, African infrastructure needs in transport, power and communications continue to be massively under-financed – and Covid-19 only increases this urgent need for long-term financing. While our analysis clearly shows that China could make a difference, multilateral lenders, other countries and their private sectors must also find ways to do their part – both by providing debt relief themselves but also by shifting how they see “debt risks” going forwards. Without these shifts, action by African governments and the Chinese government could be in vain.


* Development Reimagined would like to thank the team at Oxford China International Consultancy, especially Charlotte Baker and Ida, for research and analysis.

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Research Analyst

Edmond is a research analyst who is passionate about sustainable development, innovation, and the environment. Passionate about climate financing, he firmly believe there is a more reliable system to promote equality, growth, and welfare in societies without affecting the ecosystem. Through his skills, knowledge and experienced gained over 7 years, he wants to make an impact in the world of development. Edmond holds a Master’s Degree in Public Policy from Korea Development Institute and a BA Degree (Honors) in Business from University of Derby.


    Founder and CEO

Hannah Ryder is the Founder & CEO of Development Reimagined. A former diplomat and economist with 20 years of experience, named one of 100 most influential Africans in 2021, she is also Senior Associate for the Africa Program of the Center for Strategic International Studies (CSIS), sits on the Board of the Environmental Defence Fund, and is a member of UAE's International Advisory Council on the New Economy. Prior to her role at DR, Ms Ryder led the United Nations Development Programme (UNDP)’s work with China to help it scale up and improve its cooperation with other developing countries, including in Africa. She has also played various advisory roles for the UN and OECD and co-authored the seminal Stern Review of the Economics of Climate Change in 2006.


Deputy Director

Leah Lynch is Deputy Director of Development Reimagined (DR), and head of the China office. Leah has over 10 years of experience in development and has lived in China for over 8 years. Leah has also travelled extensively around Asia and Africa for research. Leah supports the strategic direction of the team across China, with a mission to deliver high quality research on sustainable development and poverty reduction. Leah is also Chair of the Sustainability Forum at the British Chamber of Commerce in China, providing direction on sustainability initiatives for British and Chinese business. Leah has also consulted on various evaluations on UK aid (ICAI) and is a specialist on development cooperation from the UK and China. Leah has also consulted on various UN projects, including providing support to the UN China team during the COVID-19 Pandemic. Prior to DR, Leah was at the United Nations Development Programme (UNDP) China, supporting the UN’s portfolio on communication strategies, China’s South- South Cooperation and the Belt and Road Initiative (BRI). Before UNDP, Leah lived and worked in Kenya developing sustainable water policies for the Kenyan government.


China-Africa Policy Analyst

Yike Fu is a Policy Analyst and has been responsible for leading numerous areas of work, including on debt analysis in Africa and beyond, and China-Africa trade and investment logistics and analysis. She is the co-author of “African Debt Guide”, in which she challenged the narrative that Africa is in the midst of a new debt crisis by analysing data back to the 1970s and adopting new metrics to present the real story behind the data. She also developed a benchmark to compare the financial distribution of development partners such as the UK, US, Japan, France and China in Africa. Prior to her role at DR she worked at the International Finance Corporation and African Union Representational Mission to the US. She holds a Masters in International Affairs from George Washington University.


Research Analyst

Judith is a Research and Policy Analyst, where she specialises in Africa-China relations, international development, and diplomacy. During her time at Development Reimagined, Judith has co-authored several articles published in The Diplomat on debt and China-Barbados relations and was quoted by China Daily in a piece on Women Rights in China. Previously, Judith worked as a research analyst for an Advocate and Commissioner and Oats office in Kenya.


Policy Analyst

Ovigwe specialises in geopolitics with particular reference to Africa in a changing Global Order. He is adept at critically analysing the politics of contemporary development processes and providing insight into the geopolitical interests that influence them. His work includes research, publications, tailored briefings and advising on global and regional trends, and issues at the nexus of geopolitics and development. Ovigwe appears frequently in media around the world such as Al Jazeera, TRT World, SABC, CGTN, BBC Radio, and other platforms.


Policy Analyst

Jing leads China-African health and agriculture cooperation research at Development Reimagined, having managed our FOCAC Policy Analysis and Advocacy project. She is also the co-author of “China-Africa Health Cooperation under FOCAC Umbrella”, in which she analysed China’s commitments around health cooperation since the first FOCAC summit and deepdived into four African countries’ health overview, challenges and cooperation with China as cases studies. Before DR, Jing worked at GIZ Cambodia on M&E of a disability advocacy project. She also worked as a translator with Chinese medical team in Benin.


Trade Policy Analyst

Patrick is an International Trade Policy and Trade Law Expert with over 5 years of experience. His expertise includes trade law, trade policy analysis and regional integration. He is currently engaged with Development Reimagined as a Senior Trade Analyst and was the lead author of Development Reimagined's recent Report on Africa-China Relations titled "From China-Africa to Africa- China: A Blue Print for a Green and Inclusive Continent-Wide Strategy Towards China." and “Reimaging FOCAC Going Forward.” Patrick has previously consulted for the East African Community, UNECA and for the Kenya Ministry of Trade.


Senior Policy Analyst 

Rosemary is our Senior Policy Analyst. She is a skilled policy analyst and has previously worked as a UK civil servant. She is studying Human Rights at Birkbeck, University of London with a research focus on international law in the context of health crises such as the COVID-19 pandemic.


Project Manager and Africa-China Communication Assistant

Jade is a Project Manager for Development Reimagined’s flagship project Africa Unconstrained, which focuses on financing needs and debt vulnerabilities of African countries. Her research focuses on China-Africa development finance alongside debt vulnerabilities, infrastructure needs and South-South cooperation. She has worked with a breadth of stakeholders from China, Africa and the wider international community, including governments, private sector, NGOs and civil society. Her writing has appeared in a number of publications, including The Africa Report, The China-Africa Project, The Diplomat and more. Jade holds a Master’s in China and Globalisation studies from King’s College London.


Programme Manager

Rosie is the Project Manager of Africa Reimagined (AR) at Development Reimagined (DR) where she supports high-end African brands with entering the Chinese market by operating services such as trademark protection, Chinese market research, Chinese partnership building, and Africa to China logistical support and import/export services. Rosie has worked with DR for over two years now with proven success in helping high-end African brands navigate the Chinese market. She is extremely passionate about her work because more African brands selling in the Chinese marketplace means African countries can export MORE value-added goods, create MORE jobs and foster MORE innovation in African countries.

Rosie is also alumni of the School of International Studies at Peking University in Beijing where she is also an editor at the Peking Africa Think Tank. PATT is led by a diverse group of scholars who specialise in African Studies within the context of Sino-Africa relations.



Lauren has lived in six countries from the Americas to Europe and Asia and speaks both French and Spanish proficiently. At Development Reimagined, Lauren’s research focuses on climate action both in the Asia-Pacific and in Africa, and how countries are using tools such as SDGs and Covid-19 action to build a more climate-resilient future. She holds a Masters in International Relations from Leiden University.



Etsehiwot holds a Masters’s degree in Development Studies from the London School of Economics. She has diverse experience in humanitarian and development issues by working in both multilateral organizations and international non-governmental organizations. Etsehiwot is currently a consultant focusing on the SDGs and development finance.


Economist Consultant

Dibekulu is an economist by training. He holds an MSc in International Development Studies from Palacky University Olomouc, an MSc in Development Economics from the University of Clermont Auvergne, and an MSc in Economics, Finance, and International Integration from the University of Pavia. At Development Reimagined, he works as an Economist consultant. He has strong data analysis skills, with research interests centring around development finance, impact assessment, food security, and agricultural insurance.


Project Manager

Osaru is a health professional with an MSc in Health Systems Policy and an interest in women’s health and population management. At Development Reimagined, she applies her health sector experience to global health research and collating locally applicable development insights from China.


Research Analyst

Ferdinando’s research at Development Reimagined is centred on South-South Cooperation dynamics, specifically on the analysis of Chinese investment and debt flows in Africa and their linkages to African industrialisation. He is currently a Yenching Scholar at Peking University, after having graduated from the University of Cambridge with an MPhil in Development Studies.


Research Analyst

David is a Research and data analyst at Development Reimagined. His scholarly focus is mostly on interdisciplinary research in demographic economics and development with interests in migration, economic development and policy, education, health and subjective well-being. He is currently a PhD scholar at Nelson Mandela University from which he also holds Economics and Statistics and respectively.


Research Analyst Kenya

Ivory is a Kenyan lawyer with experience in policy research and analysis. She also supports the communications team at DR. Ivory speaks English, Swahili and French.


Research And Data Analyst China 

Joy Ene is a Research and Data Analyst at DR. Joy is passionate about African/global development, poverty eradication and trade policies between underdeveloped and developing countries. She is also a fourth-year student of International Economics and Trade at the  Liaoning University, Shenyang, China. She serves as the President of the Student Union, Liaoning University, International Students chapter.


Research Analyst 

Chensi Li is a research analyst. She has previously worked for local NGOs in Nigeria and Cameroon and think-tanks in China.  Her research areas include Sino-African relations, African foreign affairs, public diplomacy, state-building and national governance.

Yixin Yu

Research Analyst 

Yixin is a Junior Research Analyst and her focus areas is on public-private partnership and entrepreneurship. She has over three years of working experience in both private and public sectors in Ethiopia. She was the China Liaison Officer for project ‘Partnership for Investment and Growth in Africa’ at International Trade Centre, where she accumulated rich experience in investment and trade promotion


Founder and CEO

Hannah Ryder is the Founder & CEO of Development Reimagined. A former diplomat and economist with 20 years of experience, named one of 100 most influential Africans in 2021, she is also Senior Associate for the Africa Program of the Center for Strategic International Studies (CSIS), sits on the Board of the Environmental Defence Fund, and is a member of UAE's International Advisory Council on the New Economy. Prior to her role at DR, Ms Ryder led the United Nations Development Programme (UNDP)’s work with China to help it scale up and improve its cooperation with other developing countries, including in Africa. She has also played various advisory roles for the UN and OECD and co-authored the seminal Stern Review of the Economics of Climate Change in 2006.