Jan 30, 2023 - Podcasts

China's massive debt deal with Africa

Treasury Secretary Janet Yellen traveled to Africa last week to deepen U.S. ties in the continent. That comes as China is working on how to restructure debt in the region after loaning around $700 billion to Africa over the last two decades.

  • Plus, the end of the Memphis Scorpion police unit.
  • And, a surge in violence between Israelis and Palestinians.

Guests: Axios' Hans Nichols and Shawna Chen.

Credits: Axios Today is produced by Niala Boodhoo, Alexandra Botti, Naomi Shavin, Fonda Mwangi and Alex Sugiura. Music is composed by Evan Viola. You can reach us at [email protected]. You can text questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893.

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Editor's note: This episode has been corrected to reflect that the roughly $700 billion in outstanding African debt belongs to many countries and institutions, not just China, which has roughly 12%.


NIALA: Good morning! Welcome to Axios Today!

It’s Monday, January 30th.

I’m Niala Boodhoo.

Today on the show: the end of the Memphis scorpion police unit. Plus, a surge in violence between Israelis and Palestinians. But first: Secretary Yellen in Africa… and China’s massive debt deal with the continent. That’s today’s One Big Thing.

Secretary Yellen in Africa

NIALA: Treasury Secretary Janet Yellen is nervous about what happens if the debt ceiling isn't raised this summer. That's according to what she said to Axios’ Hans Nichols during her trip to Africa a few days ago. Hans is here with us now to tell us more about that interview. Hey, Hans.

HANS NICHOLS: Good morning.

NIALA: What did Secretary Yellen say about the status of the debt ceiling besides the fact that she's nervous?

HANS: First of all, there's going to be, if there's a debt default and that is to say, if Congress doesn't extend the debt ceiling and increase the borrowing capacity of the United States government sometime in early June, we don't know exactly when the X date is. There'll be a financial crisis, there'll be a recession, the recession will get worse because there won't be tools to respond to the recession. That's why there's a great deal of concern about this in financial markets. That's why everyone's watching this so closely and that's why everyone's watching it so much further out in advance. Remember, we're five months away, and normally you and I would have this conversation like five weeks away, maybe five days away, but everyone recognizes that this time maybe, and I stress maybe, different.

NIALA: She was also basically front and center in 2011 during the debt ceiling showdown, so she has some experience with this.

HANS: Yeah, she, I mean, she watched it, she was vice chair of the Fed at the time, you know, in the 2011 case, you had a downgrade by the ratings agencies and you sort of saw the beginnings. So she saw how something, a potential meltdown can start to happen. Of course, we pulled back from the brink then. I would just say two things, one, yes, she's the treasury secretary, she's part of an administration and they're trying to put political pressure on Republicans. At the same time, Janet Yellen is also an economist, and my joke about Janet Yellen is she's just like any other economist, only more so, which is to say she really likes numbers, she really likes data.

And if you listen to her closely, she's really trying to preserve her ability to referee this, because remember, she's keeping the shot clock on just when we hit X date and when I sort of pressed her on who she's talking with among congressional Republicans, how is she gonna negotiate this? She made it very clear that it's up to Congress and the White House and the President to figure this out, she wants to make sure everyone knows where the country is and where the finances are and how close we are to going off the cliff.

NIALA: You were with Secretary Yalllen on this trip to Africa. The purpose of which was to deepen U.S. ties on the continent, and this comes as China is making big strides in the region. What do we need to know about China's relationship with Africa, right now?

HANS: It's facing a big test, right? For the last 20 years, China's been the biggest lender to Africa but they've never really gone through a big default. And in the past when we've had debt restructurings, this happens, wealthy nations have gotten together and figured out how to take a haircut, and that basically means you write down and you restructure the debt. China's never had to do that and they came up with this new sort of program plan of action called the Common Framework. And Zambia, which is, you know, has all kinds of fiscal problems, has been in default. Zambia is really the test case and China is playing pretty hard as a creditor and driving a pretty tough bargain in Zambia because they see it as a precedent. They see it very much as go Zambia goes the rest of Africa. And there will be other debt structure, debt restructuring. Ethiopia's in line, Ghana's in line and that has other countries nervous beyond just Zambia.

NIALA: So we're talking about $700 billion has been loaned to Africa from China over the last two decades. What kind of political power does that give China throughout the continent versus say the U.S.?

HANS: You see China's influence everywhere. I mean, I would distinguish between power versus influence. And just take Zambia, it is Africa's second biggest copper producer. Very rich in that mineral, so Chinese goods come in as the Zambian copper goes out.

Now you see the Zambian government and they really want all the international players, the U.S., the IMF, everyone to come in and convince China to move a little faster to do the debt restructuring because if they don't have a debt restructuring, Zambia's economy continues to spiral downward. And there's really no prospect for growth. It's like going into bankruptcy but not having a bankruptcy court. And there's this new court that's coming up, it's called the Common Framework and China doesn't quite know how it's gonna participate in it, and it's very mindful that anything that it does as relates to Zambia will have implications across the continent where they've got a lot of money that's out there and they don't know if they're gonna get it all paid back.

NIALA: Hans Nichols covers the Biden White House for Axios. Thanks Hans.

HANS: Thanks for having me.

A surge in violence between Israelis and Palestinians

NIALA: There’s been a recent spike in deadly violence and heightened tensions between Israelis and Palestinians.

Here is what's going on: On Thursday, an Israeli raid on a Palestinian refugee camp left nine Palestinians dead.

The following day, a Palestinian gunman opened fire outside of a synagogue in Jerusalem at the beginning of Shabbat, the Jewish day of rest, killing seven people.

Then Saturday, a 13-year-old Palestinian shot and wounded two Israeli men. Israeli police say the minor was shot and wounded as well.

This is all unfolding in the leading up to a visit from Secretary of State Anthony Blinken, that begins today.

We’ll have the latest and how we got here, tomorrow on the program

NIALA: In a moment, the Memphis police department disbands its scorpion unit after the beating and death of Tyre Nichols.


The end of the Memphis Scorpion police unit

NIALA: Welcome back to Axios Today. I'm Niala Boodhoo.

On Friday night, Memphis authorities released graphic video footage of the police beating of Tyre Nichols, who died three days after being in police custody.

Less than 24 hours after this video was made public, the city's police department permanently disbanded the special police unit known as Scorpion. That's where all five of the police officers charged with second degree murder in Nichols’ death were working. Axios’ Reporter Shawna Chen has been covering the story.

Shawna, what exactly was this police unit?

SHAWNA CHEN: This was a team that was created in the fall of 2021 in a bid to combat violent crime that had increased in the city over the years. And the main way that they operated was they would kind of flood what they considered to be crime hotspots with, you know, a lot of patrols, usually 10-people teams. They often drove in unmarked police cars and were supposed to, you know, deal with primarily illegal gun possession, carjacking, homicides, so like really violent crimes.

NIALA: Prior to Tyre Nichols’ death, were there calls to disband this unit?

SHAWNA: Both the Memphis police chief and mayor have said that this unit helped decrease violent crime in the months after it was formed. But activists have said that they've have received reports of other Scorpion officers’ use of excessive force on black community members prior.

NIALA: So how did the decision to disband this unit come about?

SHAWNA: Yeah, so first I think the important thing to note is that the release of the footage on Friday caused a huge backlash. Seeing the footage itself and hearing the audio created a whole next level of horror. And so within 24 hours, the police department, uh, announced that they were gonna disband the unit. And they wanted to be clear that, you know, the entire team has done good, uh, but the name has now been shamed because of these five police officers' actions. And thus, they believe that it's best to deactivate it permanently, so as to be able to rebuild trust with the community.

NIALA: Do other police departments in other cities have similar units, Shawna?

SHAWNA: This is definitely not the only city with this type of patrol. And this isn't, you know, the first time either that we've seen corruption or misconduct on these teams. In 2017, several detectives in Baltimore's Gun Trace Task Force were convicted of robbery, extortion, and racketeering while on duty. Uh, and a similar unit in Chicago that was known as the special operations section was also permanently disbanded after some officers faced charges for committing robberies in home invasions under, usually under the guise of traffic stops and, you know, home searches.

What we're watching for next is whether other police departments with similar specialized policing units will also scrutinize the actions of the force members. Attorney Ben Crump and Nichols’ family have called on the Department of Justice to open probes into cities with similar policing units, on injuries and deaths related to these kinds of patrols.

And so, yeah, this is definitely gonna be part of a larger conversation as the movement against police brutality kind of evolves into its next phase.

NIALA: Shawna Chen is a breaking news reporter for Axios. Thanks Shawna.

SHAWNA: Thanks for having me.

NIALA: That’s it for us today! You can reach our team at podcasts at axios dot com or you can text me at (202) 918-4893.

I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.

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