AFRICAN NATIONS HAVE BECOME THE VICTIMS OF DEBT TRAP LAID BY WESTERN INSTITUTIONS THE AFFECTED COUNTRIES MUST JOINTLY FIGHT TO GET RID OF THE GROWING MENACE

Debt is a crucial source of financing for development. However, when debt becomes burdensome, it can threaten the very sovereignty of a nation. This is the situation that many African states are facing today. I have learned about Africa’s rich mineral wealth from my students from various African States who come to
study in India. While Africa is abundant in mineral resources, its people remain very poor.

The former Western colonial powers are primarily responsible for the current circumstances. Even after
gaining independence from colonial rule, the continent continues struggling with development and appears trapped in a cycle of debt.

Africa is rich in natural resources, boasting abundant energy sources and a tropical climate ideal for food
production. The continent holds approximately 30 per cent of the world’s mineral reserves and is home to many critical minerals essential for the global energy transition.

According to the United States report titled “World Economic Situation and Prospects (2024),” many African states are facing significant financial challenges, with some spending up to 30 per cent of their GDP on debt repayments in 2025. In contrast to other mineral rich states like Australia or Saudi Arabia, many African states grapple with chronic food African Debt Trap Dr. Soma Marla insecurity and struggle to achieve sustainable development.

Debt servicing is a significant factor that diverts financial resources from developmental goals. Over 60 per
cent of African states allocate more funds towards debt servicing than to critical sectors such as  healthcare, education, and infrastructure. Twenty low-income African states are at risk of debt distress, collectively owing 685.5 billion to external creditors as of 2023, primarily to Western financial institutions like the World Bank and the International Monetary Fund (IMF).

In 2024, African states paid102.6 billion in external debt service. Notably, the external debt these states owe is equivalent to 24.5 per cent of their combined GDP in 2023.

The Democratic Republic of the Congo (DRC) and Nigeria are considered the wealthiest states in Africa, primarily due to their mineral exports and high GDP. The DRC ranks among the richest states in the world in terms of mineral resources, estimated to be worth 24 trillion. However, many African states face significant poverty, and despite their wealth in resources, they have among the poorest populations globally.

Nigeria’s economy is driven by its vast oil reserves, contributing a significant part of its revenue, agricultural output, and rapidly growing technology sector. Unfortunately, Nigeria currently spends 96 per cent of its federal government revenue on debt servicing. In the first nine months of 2023, debt servicing accounted for 66.9 per cent of the total revenue collected by the Nigerian government.

After two centuries of extracting mineral wealth, forests, and other resources, Britain, France, Belgium, and other Western colonial powers left Africa in deep human depravity. After gaining independence, these
states were forced to rely heavily on external debt to overcome underdevelopment and fund their growth.

A significant aspect of the postindependence era is that the debt borrowed from overseas was mostly
spent not on importing food and medicines but on financing infrastructure and industrial production to support the export of minerals. Although the bulk of Africa’s mineral wealth is owned by Western multinational corporations (MNCs), national governments are often obligated, according to trade agreements, to develop the road, rail, and port infrastructure necessary for facilitating mineral exports.

However, in many cases, investments financed through this debt have not resulted in a sufficient increase in output or export earnings to meet debt obligations. The imbalance in prices between exported minerals and imported finished industrial goods, coupled with biased terms of trade favouring Western states and rising interest rates, has led many states to struggle with financing their external debt. This has created a never-ending debt crisis over the past few decades.

There are six petroleum export terminals in Nigeria, with 159 oil fields and 1,481 operational wells (Department of Petroleum Resources, Nigeria). Shell (UK) owns two of these terminals, while Mobil, Chevron, Texaco, and Agip each own one. Unlike other oilproducing states, however, the citizens of Nigeria do not benefit from cheap fuel. Recently, widespread protests erupted against a hike in fuel prices. In Lagos, a litre of petrol costs N998 or 0.6 US dollars.

African states borrow from various international financial institutions, including the WB, IMF and China.
Over the past decade, many African states, unable to repay significant accumulated debt to Western
financial institutions, have sought loans from China. China has provided substantial loans to develop infrastructure, such as ports and railways, raising concerns about “debt-trap diplomacy.” Examples of
these projects include the Mombasa–Nairobi Standard Gauge Railway and the Port of Mombasa in Kenya,
the Abuja Kaduna railway line in Nigeria, and the Eastern Industrial Zone in Ethiopia.

In 2018, when Kenya appeared close to defaulting on its loans, China sought to transfer ownership of the Port of Mombasa to itself. Similarly, Djibouti, a small state bordering Somalia, defaulted on borrowed loans, prompting China to swiftly construct a military base in the Horn of Africa, where the People’s Liberation Army Navy now operates. Allegations suggest that China employs debt-trap diplomacy to compel states to
transfer resources and sovereignty to it. Consequently, British, American, and French mining MNCs are on one side. At the same time, China operates on the other, both engaging in mineral extraction and plunging African states into a cycle of debt. As of December 2024, Africa’s total external debt exceeds 1.152 trillion, which continues to rise.

Good governance, characterised by a ruling elite free from corruption and a commitment to transparency in trade and debt agreements, appears to be a viable alternative for many African states. However, internal civil wars and military coups have been recurring phenomena in several African states over the past six decades. Interestingly, local warlords controlling mineral-rich regions often receive ammunition and tacit
support from Western imperialist powers.

The brutal assassination of Patrice Lumumba, the democratically elected President of Congo, in 1961 by Belgium—then a former colonial power—with the implicit support of the United States, highlights this issue. This assassination occurred shortly after Congo gained independence and aimed to restore control over the country’s mineral wealth to Belgium. Recent efforts by some African states to form a united African Union are a positive step towards asserting sovereignty over natural resources. These states should collectively advocate for cancelling debts owed to Western financial institutions. Achieving freedom from external debt could lead Africa towards people-centric development and help attain the Human Development Goals established by the United Nations.