You Will Not Believe How Much Money Crazy Africa Owes To Communist China

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by Capitalist Exploits
Monday, Feb 20, 2023 - 15:24

- Chris MacIntosh | Insider #265 Newsletter

Understanding the probability of economics and politics — and hence where best to invest our capital — I’ve found that following trade first is one of THE best indicators. Oftentimes we’ll see some trade deals announced, but when you look back on what preceded that trade deal, all too often you find that the trade volumes had already increased markedly. We’ve spoken about this before.

Today, let’s explore the question of who has the most influence in the global South and specifically Africa.

Some stunning stats on what China has built in Africa:

  • 100 sea ports
  • 1000 bridges
  • 10,000 km of railways
  • 100,000 km of highways
  • 200,000 Km of optical fiber (for broadband internet)

This has all taken place while the West/USA hasn’t done much more than whinge about “Chinese influence” while peddling debt programs via the World Bank and IMF that continue to enslave these countries.

Chinese built train in Africa

Adding Much-needed Certainty and Stability to An Unstable and Uncertain World — New Opportunities From Chinese Path to Modernization

And this…

In Africa, China is building influence, brick by brick

China has built 186 government buildings in 40 African countries! Plus, stadiums, schools, hospitals, public housing etc. Nobody is stopping the US/EU from doing such projects. So either put up or shut up!

I find it remarkable that the IMF itself has warned the global South of a “Chinese debt trap.” Talk about the pot calling the kettle black.

Chinese debt trap

So about that “debt trap…” let’s take a look to see if the accusations stand up to the evidence.

Developing nations have external debts of more than $9 TRILLION. And most of it is owed to the US, EU, IMF, and the World Bank.

China accounts for only 12% of Africa’s debt. The other 88% is owed to — deep breath — the USA, Wall Street, Europe, IMF, and the World Bank. Africa’s total external debt is now about $700 billion.

African states’ private debts three times that owed to China

China accounts for only 12% of Africa’s debt

The eight African countries that are most indebted to China are:

  1. Angola ($36bn)
  2. Ethiopia ($14bn)
  3. Zambia ($6bn)
  4. Cameroon ($5bn)
  5. Kenya ($4bn)
  6. Nigeria ($4bn)
  7. Congo ($2.5bn)
  8. Djibouti ($1.5bn)

What else? The average interest rates on Chinese loans stand at 2.7%, while the average interest rates on Western loans stand at 5%.

The average interest rates on Chinese loans stand at 2.7%

Now, before I get accused of being a “Chinese propagandist” (or whatever the Karens dream up), realize I’m simply looking at the numbers and presenting them to you.

They are important for the simple reason that much of anything that exists in the world can be explained when understanding the economics behind it.

The reason or at least one reason Africa is so pha-cdup is due to the very real fact that those purporting to “help” it has never had any interest in doing so.

Subservience has always been the end goal while ensuring that resource flows are optimized for the power brokers.

The first time I began to understand this was when it dawned on me that Africa is always growing export crops but never producing their own food.

This from a continent that is the most malnourished, poverty stricken in the world makes about as much sense as more than two genders does. It’s loopy.

It’s going to take some time, but the world is changing before our eyes. While I’ve no particularly splendiferous ideas related to all of the above, I think it worth at the very least understanding it.

I say this because it’s pretty rare that any truly obvious investment opportunity presents itself immediately and without understanding much of the underpinnings to it.

As such we collect information — all the time. Let it age like a good bordeaux and at some point in the future what appears to be obvious as mud to us has yet to enter the collective thinking of the masses and hence the market.

This is where asymmetry arises — where the collective opinion and pricing is out of touch with reality. So just file this bad boy in the back of your mind, and we’ll see what happens.

Chris MacIntosh
Capitalist Exploits | Glenorchy Capital Macro fund | Subscribe to Insider | Rebel Capitalist Pro

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