Right after U.S. Treasury Secretary Janet Yellen called China a “barrier” to debt reform in Africa this week, Chinese officials in Zambia taunted at US – get your own house in order.
According to the Chinese Embassy in Zambia’s website, “the biggest contribution that the US can make to the debt issues outside the country is to act on responsible monetary policies, deal with its own debt problem, and stop sabotaging other sovereign countries’ active efforts to solve their debt issues.”
Republicans in the House are threatening to refuse to vote on a new debt ceiling, a figure that reflects money already spent and now owed by the government, in order to put pressure on the Biden administration and Democrats to cut spending programmes. So far, the Biden administration has refused to negotiate, relying on hardline Republicans to back down in the face of pressure from businesses, investors, and moderates.
The national debt of the United States is approximately $31 trillion, up from $5.6 trillion in 2000, due in part to increased spending for an ageing population, outlays for the Iraq and Afghanistan wars, COVID-19 programmes, and tax cuts that reduced revenues.
Yellen and IMF Managing Director Kristalina Georgieva arrived separately in Zambia on Sunday to emphasise the importance of debt reform in Africa.
Zambia defaulted on its debt in 2020 and has made little progress in restructuring it with Chinese and private creditors to date, contributing to citizens’ poverty.
According to the World Bank, the world’s poorest countries face $35 billion in debt-service payments to official and private-sector creditors in 2022, with China accounting for more than 40% of the total.
The African Development Bank said last week that rate hikes by the United States Federal Reserve to combat domestic inflation, as well as an appreciating US dollar, have increased African countries’ debt service burden.
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