The Democratic Alliance on Sunday warned that South Africa needs to beware of falling into a “Chinese debt trap”.
The DA says it will ask parliamentary questions to the presidency and Finance Minister Nhlanhla Nene to provide full details of the terms and conditions attached to the “gift” of R370 billion President Cyril Ramaphosa has apparently negotiated with China.
Recent media reports indicated that the Chinese government had promised this multi-billion rand “gift” to South Africa as some sort of stimulus package, DA spokesman Alf Lees said.
“It would be naive in the extreme to think that this ‘gift’ from the Chinese comes with no strings attached. The Chinese have a history of getting more than their pound of flesh is worth out of African and other countries that they make funds available to,” he said.
This was well illustrated by the “debt trap that China lured Sri Lanka into by offering funding for a port development that everyone, including the Chinese, apparently knew would not be viable and that Sri Lanka would not be able to repay”. This resulted in Sri Lanka apparently being forced to hand over its Hambantota Port plus 6070 hectares of land around it to the Chinese when they defaulted on repayments of the loans.
“The Chinese now have their foothold on a strategic international commercial and military waterway. The Chinese modus operandi is clearly to initially offer good terms, knowing that more money will be asked for and then, as more money is requested, the terms and conditions become more and more onerous until the borrowing country finds itself in a debt trap. Once it cannot pay China what is due, the debt-ridden country is forced to give up assets and sovereignty that were included as the terms and conditions got more and more strenuous.
“President Cyril Ramaphosa is desperate for the US100 billion in foreign investment funding that he promised to South Africa. Despite his protestations to the contrary, Ramaphosa is highly likely to accept the Chinese terms and conditions that could very quickly result in a debt trap where repayments cannot be met and the Chinese start to take ownership of South Africa like they have done in Sri Lanka,” Lees said.