Zambia is defaulting on it’s loans with China and now China is set to take over the national power utility ZESCO.

via openzambia:

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The publication Africa Confidential has revealed that secret talks are underway for a Chinese company to takeover ZESCO. This is yet another instance of Zambia handing over sovereignty to the Chinese, putting us in a dubious position should we default on loans, leaving the Chinese to seize government assets.

 

In a report titled ‘Bonds, bills and ever bigger debts’ published on September 3, Africa Confidential observed that ZNBC was already being run by the Chinese.

 

“A major worry of the IMF and US is that China’s BRI strategy is first to encourage indebtedness, and then to take over strategic national assets when debtors default on repayments. The state electricity company ZESCO is already in talks about a takeover by a Chinese company, AC has learned. The state-owned TV and radio news channel ZNBC is already Chinese-owned. The long-term outcome could be effective Chinese ownership of the commanding heights of the economy and potentially the biggest loss of national sovereignty since independence,” the report read.

 

There are serious concerns that the Zambian government has indeed underplayed the amount of Chinese debt we have, which if released would be shocking to all Zambians.

 

In the article, Africa Confidential reiterates the IMF’s concerns that Zambia has ruined its finances by getting into financial difficulties thanks to over use of Chinese debt, especially for overprices and poorly carried out infrastructure projects.

 

The Americans have branded China’s ‘loans’ to Africa has predatory and part of a wider scheme to ‘debt-trap’ African nations – thus allowing them to control them.

 

Perhaps more concerning is that the PF government are divided over what is really going on, Africa Confidential noted that although Finance Minister Margaret Mwanakatwe announced that all Chinese projects below 80 per cent completion would be halted, President Edgar Lungu told Chinese nationals that all projects would go ahead as planned.

 

Since President Edgar Lungu came to power, Zambia has signed off on at least US$8 billion in Chinese project finance. Over $5 bn. of this has not been added to the total because Zambia insists the money has not been disbursed, and more large loans are in the pipeline.

 

The PF government has continued to spend lavishly despite our country being in debt distress, leaving us even more vulnerable in the hands of the Chinese.