China cancels 23 interest-free loans to 17 African countries

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China said it would cancel 23 interest-free loans to 17 African countries and also provide food aid to struggling countries.

This was revealed by Chinese Foreign Minister Wang Yi, who announced the cancellations during a meeting last week at the Forum on China-Africa Cooperation, according to an article posted on the ministry’s website.

The minister did not specify which countries owed the money or the amount of the loans, which he said had expired at the end of 2021.

Nonetheless, the move is not new as Beijing has declared numerous rounds of debt cancellation of interest-free loans to African countries since 2000, eliminating at least $3.4 billion in debt through 2019, according to a report. Johns Hopkins University School of Advanced International report. Studies.

What the Chinese minister says

“China will waive 23 interest-free loans for 17 African countries that had come due by the end of 2021,” Wang said at the China-Africa Cooperation Forum, according to a statement.

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He pledged that China will continue to support and actively participate in the construction of major infrastructure projects in Africa through financing, investment and assistance.

“We will also continue to increase imports from Africa, support the further development of Africa’s agricultural and manufacturing sectors, and expand cooperation in emerging industries such as the digital economy, health, green and low carbon”.

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“What Africa wants is a supportive and friendly environment of cooperation, not the zero-sum mentality of the Cold War,” Wang said, according to the post.

Since the Forum on China-Africa Cooperation was held in Senegal in November 2021, Beijing has provided $3 billion of the $10 billion in credit facilities promised to African financial institutions, Wang said in his statement. speech.

In addition, this year China accepted duty-free entry for 98% of exports from 12 African countries and provided emergency food aid to Djibouti, Ethiopia, Somalia and India. Eritrea, he said.

“So far this year, China has signed an exchange of letters with 12 African countries on zero tariffs for 98% of their export items to China. We have provided emergency food aid to Djibouti , Ethiopia, Somalia and Eritrea More African agricultural products have reached the Chinese market through greenways,” he added.

What you should know

  • Beijing accounts for nearly 40% of bilateral debt and private creditors that the world’s poorest countries have to repay this year, according to the World Bank.
  • Nigeria, a country that spends 96% of its revenue on debt servicing in 2021, also owes China $3.63 billion, according to data released by the Debt Management Office.
  • According to Forbes, the African countries most indebted to China as a percentage of gross national income are Djibouti (43%), Angola (41%) and the Democratic Republic of Congo (41%). (29 percent).
  • Inflationary pressures have prompted a wave of interest rate hikes by central banks around the world, including the US Federal Reserve, raising the cost of sovereign loan repayments.
  • Meanwhile, developing countries have created a quarter-trillion-dollar pile of troubled debt, threatening an unprecedented cascade of defaults by economies that were already struggling before the Covid-19 outbreak. .

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