Commons Sense

House of Commons · Ministers' Questions

Africa: Sovereign Debt

Tuesday 13 December 2022 · 3 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 3 Not answered 0

Key points

  • Kate Osamor inquired about the potential effect of trends in African sovereign debt on regional stability.
  • The Minister responded that the UK provides bilateral technical assistance to help African countries manage their public funding.
  • The Minister also stated concern over the potential understatement of Chinese sovereign debt in African countries like Zambia.

Topics (select to filter)

Questions & Answers

Q1 Kate Osamor Labour (Co-op) Edmonton and Winchmore Hill
Foreign Affairs
Context

The MP raised concerns about the significant impact of high sovereign debt levels on African countries' stability, citing recent crises such as drought in the Horn of Africa and floods in Nigeria.

Question

What assessment he has made of the potential effect of trends in the level of sovereign debt in Africa on stability in that region. I thank the Minister for his reply. We have seen crippling crises affect various parts of Africa this year, from drought in the horn of Africa to floods in Nigeria. The debt burden of many low and middle income countries impacts the state's capacity to cope, and the crisis only worsens the economic outlook further.

Answer from Andrew Mitchell

We look at every way of helping to address the problem that the hon. Lady sets out. We are providing bilateral technical assistance to help many countries better manage their public funding, and we are working with partners in the Paris Club and the G20 on how to address international debt issues together.

Partly answered

Not addressed: Commitment to supporting a universal framework for debt cancellation when extreme climate events strike was not addressed

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Q2 Kate Osamor Labour (Co-op) Edmonton and Winchmore Hill
Foreign Affairs
Context

The MP highlighted concerns about potentially understated Chinese sovereign debt in Zambia and suggested that there is a need to understand the totality of debt, especially with Chinese creditors.

Question

Is my right hon. Friend concerned, as I am, that Chinese sovereign debt is perhaps understated in countries such as Zambia, where banks lend directly to the Government but are effectively controlled by the ministry of finance in China? Will he do more to understand the totality of the debt and the indebtedness of specific countries to the Chinese Government?

Answer from Andrew Mitchell

Yes. My right hon. Friend makes a very good point, and we need to show through what we do that there is a much better alternative. In 2020, we provided debt relief on repayments to the International Monetary Fund for 23 countries and contributed £150 million to the IMF catastrophe containment and relief trust.

Partly answered

Not addressed: Commitment to understand total Chinese sovereign debt was not addressed

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Q3 James Duddridge Con
Economy Foreign Affairs
Context

The MP cited IMF data indicating that three out of five poorest countries are in debt distress, highlighting the need for engagement with China and private creditors to halt defaults.

Question

The IMF says that three out of five of the world's poorest countries are now in debt distress. The last Labour Government cancelled billions of pounds of multilateral debt. Any solution now depends on China, which receives 66% of all bilateral payments, and private creditors such as BlackRock. The future of millions of the world's poorest depends on halting debt defaults, so what steps will the Government now take to engage seriously with China and bring forward the incentives, regulation and education needed to force private creditors to the table?

Answer from Andrew Mitchell

The shadow Minister makes a good point. I think she is referring specifically to vulture funds, which we will certainly address. We are working very closely with the international financial community.

Partly answered

Not addressed: Specific steps to engage China and regulate private creditors were not addressed

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