Africa Set to Get Debt Relief From China
Chinese President Xi Jinping has pledged to cancel interest-free debt owed by “relevant” African countries as part of Beijing’s move to help the continent during the Covid-19 pandemic.
In a speech to a group of African leaders Wednesday, Mr Xi indicated that he will work with other international lenders to cushion African countries most affected by the novel coronavirus to enable them ride out the crisis.
Mr Xi spoke directly to African leaders via video link for the first time since the virus broke out.
“Within the FOCAC (Forum on China-Africa Cooperation) framework, China will cancel the debt of relevant African countries in the form of interest-free government loans that are due to mature by the end of 2020,” Xi told his audience, among them South African President Cyril Ramaphosa, Kenya’s Uhuru Kenyatta and Senegal’s Macky Sall, as well as Ethiopian Prime Minister Abiy Ahmed. The leaders have been vocal in seeking easier terms on debt amid the pandemic.
“For those African countries that are hardest hit by the coronavirus and are under heavy financial stress, China will work with the global community to give them greater support, by such means as further extending the period of debt suspension, to help them tide over the current difficulty,” he added.
China is now the biggest creditor of Africa and is owed some $145 billion by the continent, including some $5 billion by Kenya.
But just under 20 per cent of these loans are interest-free, indicating the cancellation may be insufficient.