China’s debt payments are dwarfed by those of emerging nations to private lenders
Research reveals that the foreign debt payments made by lower-income nations to private lenders are still three times greater than those made to China. This highlights the intricate and expensive network of creditors that these nations must contend with as they strive to make their debt obligations.
According to a study conducted by the advocacy group Debt Justice UK, private lenders—from bondholders to commodity trading houses—have significant influence in developing nations that balance debt repayment with investments in infrastructure and education.
The findings refuted the claim that China is primarily to blame for the debt crisis in lower-income nations, according to Tim Jones, policy director at Debt Justice.
China has provided hundreds of billions of dollars in loans for infrastructure and other projects in developing nations, using the profits from the export of commodities or money kept in restricted escrow accounts from the countries that were the borrowers as collateral.
“Commercial high-interest lenders are receiving the greatest debt payments by lower-income countries,” according Jones’ statement. “Where debt payments are too high, all external creditors need to cancel debt, in proportion to the interest rates they charged.”
Developing nations continue to face unmanageable debt as concessional financing declines, borrowing prices stay high, and investment requirements for climate resilience and infrastructure increase, even though the post-pandemic wave of defaults has mostly peaked.
While Ghana and Zambia continue to negotiate with certain private creditors, Ethiopia is enmeshed in debt restructuring negotiations with bondholders who have refused haircuts.
Afreximbank and Trade and Development Bank loans totaling $439 million and $464 million, respectively, are in default, according to a recent report from the International Monetary Fund.
According to Debt Justice’s research, which used data from the World Bank, between 2020 and 2025, 88 lower-income countries and small island developing states paid $349 billion in external debt to private lenders, 39% of which went to multilaterals, 13% to Chinese public and private lenders, and 14% to repay bilateral loans to other governments.
More than thirty percent of payments from 21 of the 32 nations with the largest external debt obligations went to private lenders.
Just six of them—Zambia, Djibouti, Congo Republic, Cameroon, and Angola—sent Chinese lenders more than 30% of their foreign loan payments.
Additionally, the statistics revealed that repayments to international lenders increased significantly, rising from $30 billion in 2020 to $70 billion in 2025.
According to Jones, the increase came as international lending ramped up during the COVID-19 epidemic in 2019. According to him, many of those loans are beginning to mature now, whereas those with variable interest rates would have grown more costly during the worldwide cycle of interest rate hikes.
