Benn: China's actions will harm development in Africa

In total Africa is likely to get something in the region of $5bn (£2.6bn) in 'soft loans' and grants from Chinese government over the next few years. On the face of it this sounds a fantastic deal for the continent but the reality is that such loans may end up doing more harm than good. Massive loans like these could well plunge some African countries back into debt and undermine the West's efforts to promote good governance on the continent.

This is why Hilary Benn is right when he argues that China's offer of cheap loans to African governments will risk driving back into debt countries that have only just benefited from debt relief. Both Christian Aid and the Financial Times agree with Benn's stance. The FT argues that:

China's policy in Africa is not an alternative to neo-liberalism. Beijing is intent on securing raw materials and commodities to fuel its own booming economy, and on finding new markets for Chinese exports. That sounds very like the past strategy of western colonial powers."

The sad consequence is that if the Chinese continue to offer no-questions-asked loans, many US and European banks will inevitably think again about linking loans to good governance and other conditions. Who benefits then?