The Zambia Institute for Policy Analysis and Research (ZIPAR) has encouraged the Zambian Government to focus on attracting Foreign Direct Investment (FDI), attracting China to import from the country, and to a much lesser extent, accessing grants, concessional loans and interest-free loans.

ZIPAR Executive Director Pamela Kabaso says these options should be pursued in that order of priority under Forum on China-Africa Cooperation (FOCAC) FOCAC 2018.

Dr. Kabaso says the country should stay clear of the development financing option and especially credit line option.

Earlier in the month, Chinese President Xi Jinping made an impressive and generous offer of US$60 billion in financial support to African countries over the next three years.

Since then the African continent cannot stop talking about China.

Some observers are keen for Africa to benefit from the funding galore.

Others are worried that the financial bonanza is actually a spring-trap set to ensnare African states into inadvertently giving up their sovereignty.

Dr. Kabaso notes that it might be a good idea to understand what this US$60 billion financial support really entails for Africa and Zambia, lest the continent’s borrowing enthusiasts go laughing all the way to the nearest Chinese bank to borrow some more.

“Of course, all five financing options are quite fleeting for Zambia currently, given the prevailing economic situation. In particular, the huge debt overhang should impose natural borrowing constrains over the medium term,” she said.

She says the development financing option of US$10 billion would typically be quite attractive for Zambia.

Dr. Kabaso however notes that drawing lessons from the country’s failure to account for the utilization of the debt proceeds from the three Eurobonds, totaling US$3.0 billion, Zambia must come to terms with the fact that it is not prudent in using development financing resources.

The ZIPAR Executive Director says this development financing option is yet another poison chalice, which Zambia should avoid.