CEM REPORT | The government of the People’s Republic of China have stated that it is prepared to cancel the loan of 17 African countries in its books that had matured at the end of 2021.
China also reveals that it has agreed to lift tariffs on 98% of exports from 12 African countries.
According to a statement on the website of the Chinese Foreign Ministry, the Foreign Minister, Wang Yi made the disclosure in a meeting last week at the Forum on China-Africa Cooperation.
“China will waive the 23 interest-free loans for 17 African countries that had matured by the end of 2021.”
According to the statement, the Minister further pledged that the Chinese government would continue to actively support and 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 greater development of Africa’s agricultural and manufacturing sectors, and expand co-operation in emerging industries such as the digital economy, health, green and low-carbon sectors.”
“What Africa wishes for is a favourable and amicable cooperation environment, not the zero-sum Cold War mentality.”
Although, the statement did not reveal the benefiting countries or the sum of loans that have matured at the end of 2021.
However, this is not the first as Beijing has declared numerous rounds of debt forgiveness of interest-free loans to African nations since 2000, eliminating at least $3.4 billion in debt through 2019, according to a report by the Johns Hopkins University School of Advanced International Studies.
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Additionally, the Forum on China-Africa Cooperation took place in Senegal in November 2021, Beijing has delivered $3 billion of $10 billion of credit facilities pledged to African financial institutions, Wang said in the speech.
Furthermore, China has agreed to a tariff-free entry to 98% of exports from 12 African countries and has provided emergency food assistance to Djibouti, Ethiopia, Somalia and 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 assistance to Djibouti, Ethiopia, Somalia, and Eritrea. More African agricultural produce has reached the Chinese market through the green lanes.”
Beijing accounts for almost 40% of the bilateral and private-creditor debt that the world’s poorest countries need to service this year, according to the World Bank.
Nigeria, a country that spends 96% of its revenue on debt servicing in 2021, is also owing China $3.63 billion, according to data released by the Debt Management Office.
According to Forbes, the African countries with the biggest foreign debt to China as a percentage of gross national income are Djibouti (43%), Angola (41%), and the Democratic Republic of the Congo (41%).