By Joe Cash
BEIJING (Reuters) -Zambia will host a Chinese premier for the first time in 28 years as the sub-Saharan state emerges from a financial crisis, with Beijing eager to access the country’s commodities and develop a bigger market for its exporters.
China is Zambia’s largest official creditor with $5.7 billion owed and is eager to highlight countries that are model members of President Xi Jinping’s flagship Belt and Road infrastructure initiative. China has said it would also like to show how African nations can recover from financial crises with its assistance.
Premier Li Qiang’s arrival in Lusaka on Wednesday is part of a push to deepen China’s presence in the copper-rich country as Europe and the U.S. vie to become alternative benefactors now that Zambia’s $13.4 billion in debt is on a more sustainable repayment plan.
Industrialising Zambia needs fresh investment for its mining sector, infrastructure network and production capacity, while China wants to boost exports of tractors, electrical equipment and construction vehicles. The World Bank expects Zambia’s economy to grow 6.5% next year, compared with an average of 5% over the past two decades.
“Li is going to bolster China’s presence in a strategically vital country where both the President (Hichilema) and Chinese mining companies need support,” said Eric Olander, co-founder of the China-Global South Project, referencing a February acid spill at a Chinese-run copper plant that dumped 50,000 cubic metres of contaminated water into the Kafue River, a key supply for millions of people, which is now a major election issue.
“China this year also approved a massive refurbishment of the Tazara Railway that is widely seen as a counter to the U.S./EU-backed Lobito Corridor.”
China financed the line in the 1970s to reach Zambia’s vast copper deposits through Tanzania on Africa’s east coast and is continuing to invest as the West builds up its route to the country via Angola and the Democratic Republic of the Congo.
“The debt issue is largely seen as settled,” he said.
Han Jing, China’s ambassador to Zambia, said Li’s visit was expected to produce dozens of cooperation agreements, according to a statement on the embassy’s Facebook page.
“The impact of Chinese aid and Chinese investments can be felt across the country as an important force for economic transformation and the social progress of Zambia,” Han said, encouraging Lusaka to “draw on China’s technological and economic momentum to build capacity and develop greater resilience.”
INVESTMENT OVER LOANS
After the COVID-19 pandemic forced many African countries to borrow heavily to pay for health responses, weakening their ability to repay creditors and pushing several into debt distress, governments across the continent shifted to seeking investment.
One reason Zambia’s debt restructuring dragged on for three-and-a-half years was that it had a large number of Chinese creditors, which made it difficult for the government to assert control over the process, analysts said.
Chinese companies have invested around $6 billion in Zambia over the past 20 years, according to data from the American Enterprise Institute, almost all of which went into the metals sector.
These companies now face increasing pressure from European and American firms. The European Union’s top official for international cooperation and development visited earlier this month to unveil fresh investments in transport, energy, agriculture and critical raw materials along the Lobito Corridor.
Donald Trump Jr., the eldest son of U.S. President Donald Trump, met Hichilema on Sunday, according to a post on the Zambian president’s X account.
(Reporting by Joe Cash; Editing by Thomas Derpinghaus)
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