"The Democratic Republic of the Congo (DRC) is thought to have racked up debts of more than $13 billion to China over the last two decades, much of which is related to mining and infrastructure investments.
As part of its BRI loan, DRC is one of many countries that, according to the AidData report, is required to "keep a minimum cash balance equivalent to 20% of its total outstanding debt under multiple China Eximbank loan agreements in an offshore, lender-controlled escrow account."
In periods of economic downturn or financial distress, meeting these requirements is increasingly difficult for borrowers, stifling potential economic growth that could otherwise help to pay back the loans and resulting in a never-ending cycle. At the same time, other lenders are hesitant to offer bailouts because the escrow accounts place China first in line for payment should the country default on its loans. As a result, many critics have referred to the BRI as a "debt trap."
Earlier this year, it was reported that foreign cash reserves had dropped by more than 50% in the DRC, amid fears it’s only a matter of time before the impoverished nation runs out of money for essential imports such as food and fuel."
These Countries Owe China Billions. Some Are Struggling To Pay (msn.com)
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