Article link: https://apnews.com/article/virus-outbreak-africa-health-zambia-financial-markets-0a37160eda1b5e0fe822eab8b85f7e26
In Africa, Zambia is really struggling and going into debt with private investors. Coronavirus has not helped this issue whatsoever. Zambia owes an extreme amount of money to private bondholders, commercial banks, and state lenders, including China. Zambia is unable to pay back these groups and are on the verge of defaulting. China is looking to secure natural resources to handle repayment. This is not just an issue in Zambia, it is also affecting the Sub-Saharan region and causing this to affect global trade. The main countries where this is occurring, outside Zambia, are Cameroon, Kenya, Ghana, and Sengal.
“One of the world’s top copper producers, Zambia, for years has been heavily indebted but now could get an undesired reputation for financial unreliability if a group of investors who hold $3 billion of the country’s eurobonds insist on payments that have come due.” Zambia is in a very troubled spot, especially with China. China currently holds about 1/3 of sovereign debt in Africa. While I understand that Zambia is in a difficult position and out of desperation ma have to deal with China, they should be very careful over-relying on Chinese assistance, which could be even more negative in the long run. The United States should be very concerned about Chinese economic involvement in places like Zambia and need to understand the long-term problems which could arise by letting Chinese influence go unchallenged.
This article demonstrates several ideas we have covered in class, and illustrates multiple levels including global, regional, and state. The Chinese involvement in the situation makes it a global issue. Debt and debt repayment among African countries is common, not just in Zambia, but throughout the region. It seems that Africa as a whole is unable to pay back their debts to other countries and have difficulties implementing deals to repay their debts. Then Zambia itself is struggling to work through its economic issues while balancing international involvement in its affairs.