By Victor Salami
Last month, Israel opened a new embassy in Lusaka, Zambia, after a 50 year absence. Foreign Minister Gideon Sa’ar called it part of the ‘’alliance of believers,’’ adding that ‘’strengthening our engagement with Africa is a strategic priority.’’
As the world increasingly unites in criticizing the Zionist regime’s occupation and war on Gaza, amplified by the United Nations (UN) declaring it a ‘’genocide of the Palestinian people,’’ Israel is looking to Africa as soft power destination. It hopes the pivot to the continent will translate to UN votes and economic benefits.
This explains the radical intensification of its diplomatic efforts in Africa, which saw six new Israel Allies Caucauses launched in African parliaments in Ethiopia, Cote d’Ivoire, Lesotho, Seychelles, Gabon, and Guinea-Conakry in July 2025. In April 2024, Malawi opened an embassy in Israel and the Africa-Israel Parliamentary summit was held in Addis Ababa in September.
The caucuses affirm Israel’s right to exist with Jerusalem as its capital and signal the pursuit of expanded cooperation in agriculture, technology, climate resilience and counterterrorism. But how useful is the Israeli partnership to African nations and is Israeli aid nothing more thana debt trap fro the struggling nations it claims to assist?
Israel describes its engagement with Africa as ‘’development cooperation.’’ Agriculture centers, irrigation projects and training schemes are promoted as gifts of expertise from a small state to a struggling continent. In reality, this is less about solidarity than about power. The financing is structured as buyer’s credits. What is buyer’s credit and why is it always in dollars?
Buyer’s credit is when a foreign bank pays an exporter upfront and the importing government promises to repay the bank over time. Israeli banks pay Israeli contractors upfront; African governments sign a sovereign guarantee to repay over 5 to 10 years; the loan is insured by Ashra, Israel’s export credit agency; repayments are almost always in dollars or euros, never local currency because export credit agencies insure in stable currencies.
If the local currency depreciates, the debt burden balloons. The governments must their foreign reserves to repay, cutting spending on health, education or subsidies. Citizens pay twice – once through taxes and again through lost public services. And if the projects fail, the firms are already paid and the banks are protected while African treasuries and the citizens absorb the loss.
This is a classic case of asymmetrical interdependence. Israel cultivates the appearance of soft power- attraction through technical know-how. But in practice exercises structural power, shaping the rules of finance to ensure the benefits flow one way. As former Israeli prime minister, Golda Meir, admitted after her 1958 African tour: ‘’Did we go into Africa because we wanted votes at the United Nations? Yes, of course…’’
The 1973 war pushed many African states to sever relations with Israel resulting in aid drying up overnight. But, in recent years, Israel has returned with the same formula – contracts that enrich Israeli firms while locking African citizens into debt service. In 2016, under then prime minister Hailemarian Desalegn, Ethiopia signed a $200 million buyer’s credit with Israel’s Hapoalim Bank to finance drip irrigation for its sugarcane industry by Netafim, an Israeli company. The loan looked like a development partnership, but its structure reveals the imbalance – Hapoalim paid Netafim directly, Ashra insured the risk and the Ethiopian state carried the liability over 9.5% at commercial rates.
When corruption and mismanagement crippled the sugar sector, the project under-delivered. Netafim had already been paid, repayments still fell due. Ethiopia spends less than $10 per citizen annually on health and external interest payments absorb around 0.5 to o.6% of GDP. A single instalment could have vaccinated 2 million children. Instead, scarce resources were diverted to creditors.
In 2019, President Edgar Lung’s government in Zambia, signed a $47 million buyer’s credit with Israel Discount Bank to fund an ‘’agriculture center of excellence’’ contracted to Green-2000, an Israeli firm. Insured by Ashra and Dutch export credit agency, Atradius, the structure ensured the Israeli contractor was paid upfront while Zambia carried the debt.
This came on top of a $176 million Tahal water project announced in 2017. By the end of 2022, Zambia’s external arrears reached 15% of DDP, forcing default and restructuring. Hospitals ran short of drugs; teachers went unpaid and rural roads deteriorated as repayments consumed scarce funds. Israeli firms exited whole; Zambian citizens bore the austerity.
Under President Jose Eduardo dos Santos, Angola in 2016-17 awarded the Israeli firm Tahal a $370 million contract for the Quiminha agriculture complex, followed by projects worth another $291 million. Financing was reportedly opaque but backed by the state. When oil prices crashed, debt service took precedence over social spending, while food insecurity deepened. Israeli contractors profited while Angolans endured subsidy cuts and worsening poverty.
In the 1960s and 1970s, Israeli loans backed agricultural and mineral projects, including a potash scheme in Uganda. Many under-performed, but debts endured. Today Uganda still spends about3.5% of its GDP on interest payments, a legacy of reliance on non-concessional loans. Aid framed as ‘’partnership’’ is risk-free commerce for Israel, debt for Africa. To be continued.
Salami, an economist, writes from Kano
