Debt Trap Or Development: Chinese Company To Build Modern Football Stadium In Northern Tanzania

Africa's total debt was equal to US$964 billion, or around 8% of the region's total debt

Digital Desk: In a recent development, China Railway Construction Engineering Group (CRCEG) has inked a deal with the Tanzanian Ministry of Culture, Arts, and Sports to pitch a football stadium in Arusha, Tanzania, in preparation for the 2027 Africa Cup of Nations (AFCON) finals. This is not the only investment from Chinese firms, and experts fear the growing debt in Tanzania and other African nations may put these nations into a “debt trap.” 

"Upon its completion, the stadium will not only hold football games but also commercial activities and official government ceremonies," Minister of Culture, Arts, and Sports Damas Ndumbaro said, as quoted by Xinhua.

Expected to seat 30,000 spectators across a sprawling 14.57-hectare expanse, the stadium aims to meet the rigorous standards set by both the Confederation of African Football and FIFA. 

Tanzania, alongside Kenya and Uganda, is set to co-host the 2027 AFCON, underscoring the strategic importance of this collaborative endeavour. The construction project not only underscores China's commitment to infrastructure development in Africa but also represents a significant step towards enhancing Tanzania's sports and tourism landscape.

With US$78 billion in total debt due to Chinese companies by the end of 2019, Africa's total debt was equal to US$964 billion, or around 8% of the region's total debt. Chinese institutions made numerous goodwill gestures by postponing the repayment of debt totalling approximately $750 million in response to US criticism. 

"Contrary to the debt-trap narrative, private-sector manoeuvring and intransigence will catalyse a wave of African defaults more so than Chinese scheming if a wave of defaults materialises soon," according to the study, which International Financial Institutions officials have been fearing since at least 2015.