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Debt and distress: Action time for Africa

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Consequently, China has carefully abandoned its strong preference for bilateral dealing with problem debtors. The Chinese state avoids being a rule-taker compared to the West on debt issues. Still, it increasingly appears to recognize that multilateral approaches – ideally on an ‘a la carte’ basis – can help contain both the pressures on its African partners and its challenges.

China, therefore cautiously supported the DSSI for some African nations when it came to effect in April 2020, and similarly, the Common Framework launched in 2021. However, the slow implementation of the Common Framework brings to light four specific challenges linked to China’s role.  

First is China’s discomfort with the independent and central role played by the IMF in controlling how much a country can afford to pay through its debt sustainability analysis (DSA). Second is the alarm of privates, and public sector lenders in the West over a lack of …