Debt will be a topic when Janet Yellen meets Zambia’s president and finance minister to urge China to continue negotiations.
US Treasury Secretary Janet Yellen is in Zambia for the second part of her trip to Africa. She aims to boost U.S. investments and relationships while the Chinese dollar is the dominant capital city.
Refurbished Kenneth Lusaka visitors see the facilities she expanded in 2015, funded by China, as she arrives at Kaunda International Airport. As we drive into the city, we pass newly built shops with billboards and Chinese signs, further evidence of Beijing’s influence and growing competition from the United States.
However, the growth the country has experienced has come with a higher debt burden. Zambia became the first pandemic-era country in Africa when it failed to pay off a $42.5 million bond in November 2020. Negotiations are underway on how to handle the debt burden.
How Zambia’s debt is renegotiated with China will be a test case for how generous China will be to other troubled countries facing debt problems.
US Treasury Secretary Janet Yellen is in Zambia for the second part of her trip to Africa. She aims to boost U.S. investments and relationships while the Chinese dollar is the dominant capital city.
Refurbished Kenneth Lusaka visitors see the facilities she expanded in 2015, funded by China, as she arrives at Kaunda International Airport. As you drive into the city, you will pass billboards with Chinese signs and newly built businesses, further evidence of Beijing’s influence and increasing competition from the United States.
However, the growth the country has experienced has come with a higher debt burden. Zambia became the first pandemic-era country in Africa when it failed to pay off a $42.5 million bond in November 2020. Negotiations are underway on how to handle the debt burden.
How Zambia’s debt is renegotiated with China will be a test case of how lenient China will be to other troubled countries facing debt problems.
Debt will be a topic of discussion when Yellen meets with Zambia’s president and finance minister on Monday to urge China to continue negotiations. She also tours a pharmaceutical manufacturing facility that has benefited from American investment and shows what she sees as a model for success. “Many African countries are currently plagued by an unsustainable accumulation of debt, and that is definitely a problem, and much of it is linked to Chinese investments in Africa,” Yellen said. said in an interview with the Associated Press on Saturday in Senegal, the first leg of his trip to Africa.
Still, Yellen insists the visit is not a competition with China. “We want to deepen our commitment. We have a rapidly growing young population in need of opportunity and economic growth.”
“There are many government and international programs designed to support infrastructure building efforts,” she said. “And when we do that, we want to make sure that we don’t create the same problems that Chinese investments sometimes create here.”
Yellen said the U.S. wants to invest in companies with contracts that “have the transparency that they have a project that will bring really broad benefits to the people of Africa and not leave an unsustainable legacy of debt.”
A protracted debt crisis could permanently hamper the recovery of countries like Zambia, plunging whole nations into poverty and unemployment, and crowding out credit for future reconstruction, experts say.
To showcase U.S. efforts, Yellen’s first stop in Zambia was a tour of the Mylan Institute, a subsidiary of U.S. pharmaceutical manufacturer Beatrice. The institute was opened in 2010 by him with an investment of US$10 million and manufactures drugs to treat malaria and HIV in the country and region. She also planned to stop by the Zambia National Institute of Public Health, considered a model for its kind.