China cuts promise of financing to Africa amid rising debt worries

How Brazil is reforming a public fund to finance broadband expansion

Oya agreed that the cut in proposed finance signalled “concern about the ability of African countries to absorb that much debt”. Carlos Oya, an expert on China-Africa relations at Soas, University of London, said Xi’s vaccine pledge was significant given the failure of western initiatives to supply the continent. “A billion doses of vaccine is a big pledge,” he said. “If they pull that off that would make the rest of the world look awful.” The IMF categorises more than 20 African countries as being at high risk of debt distress or already in debt distress, a list that has grown because of the Covid-19 pandemic.

Chidi Odinkalu, senior manager for Africa at the Open Society Foundations, said the reduced financial pledge showed that Beijing no longer had to try so hard in Africa. “China’s strategic objective was to get a foot in the door. Now that it’s in the door, it can choose to dictate the terms,” he said. In addition, China’s president promised 1bn Covid-19 vaccine doses, although he provided no timeframe. He also pledged to step up co-operation on ​​solar, wind and other renewable investments and to simplify procedures in order to increase agricultural imports from African states.

He criticised some African governments for relying too heavily on loans from Beijing. “The volume of credit that some of them have binged on makes them dependent beyond any sensible notion of sovereignty,” he said. While this represents a cut from the $60bn pledged at the previous two Focac summits, Xi emphasised his commitment to what he called a “win-win” relationship.

A white paper from the State Council, China’s cabinet, published on the eve of the Focac meeting, confirmed the Chinese government’s shift of focus. “China is promoting a new development paradigm with domestic economy and international engagement providing mutual reinforcement, and the former as the mainstay. China’s development will create more opportunities for Africa’s development,” it said. It pledged to carry over Chinese public health assistance during the pandemic into longer-term co-operation to improve public health systems in Africa. Last year, Zambia, which has borrowed heavily from China as well as from commercial lenders, became the first African country to default on its eurobond loans. João Lourenço, president of Angola, the biggest African borrower from China, recently told the Financial Times that Beijing was unlikely to make more concessions after agreeing relief on about $20bn of debt. Ethiopia, another big recipient of Chinese loans, has seen its economic prospects dim after descending into civil war. It has also sought debt relief.

“In the past, lots of African countries borrowed money to grow the economy, they believed they could service the debt if the economy kept growing,” said Kai Zhu, head of the China-Africa corridor at South Africa-based Absa bank. “Covid brought fundamental change to the base case and we have seen some debt restructuring and debt-relief discussions.” Chinese loan commitments to Africa peaked in 2016 at $29.5bn, but dropped to $7.6bn in 2019, the latest available data, according to the Chinese Loans to Africa Database, compiled by scholars at Johns Hopkins University.

The News Highlights

  • China cuts promise of financing to Africa amid rising debt worries
  • Check the latest News news updates and information about business, finance and more.
Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
The Digital Shop for Konami’s new Yu-Gi-Oh! video game has been revealed
The Digital Shop for Konami’s new Yu-Gi-Oh! video game has been revealed
“Adding to your card collection has never been easier with Master Duel’s intuitive and interactive Shop! Find all the Packs, Decks, and Accessories that you ...
Cohen Veterans Bioscience presents Voices of Veterans webinar to mark 'Mental Health Action Day' on May 20, 2021 |  national news
McLeod Health Foundation Receives Mobile Mammography Grant | local news
“Providing convenient access to medical care and screening supports our communities and can save lives,” said Mike Brenan, South Carolina, Regional ...
Europe's stock market closes at a week's low as the tech sector continues to fall
Europe’s stock market closes at a week’s low as the tech sector continues to fall
Two-year Treasury yields, which track short-term rate expectations in the United States, crossed 1% for the first time since February 2020. Higher lending ...
OpenSea, an NFT marketplace, acquires Dharma Labs, a cryptocurrency wallet, and changes its CTO
OpenSea, an NFT marketplace, acquires Dharma Labs, a cryptocurrency wallet, and changes its CTO
NFTs, or non-fungible tokens, are a type of digital asset which exist on the record-keeping technology blockchain. They have exploded in popularity over the ...
Qarmatek Raises $3M in Financing Round Led by GVFL and Caspian Debt
Qarmatek Raises $3M in Financing Round Led by GVFL and Caspian Debt
MOBEX has an expansive network currently of around 4000 smartphone retailers in Gujarat to alleviate their day-to-day operations of sales via E-commerce ...
COVID-19: Omicron rates remain high in Colorado at 27%, down 1% from last week: See where your county is
COVID-19: Omicron rates remain high in Colorado at 27%, down 1% from last week: See where your county is
One-week positivity rate: Here’s a look at positivity rates for every county over the last seven days: Adams: 32.2% (down from last week)Alamosa: 19.1 (up from ...
Apply for Atlanta Emergency Rental Assistance Money While You Can
January 6 Committee Has Eric Trump and Kimberly Guilfoyle Phone records
The announcement follows the issuance of additional subpoenas on Tuesday to other members of Donald Trump’s inner circle, including Rudy Giuliani, Jenna Ellis, ...
Inox Wind will offer shares worth Rs 400 cr under its IGESL IPO arm
Inox Wind will offer shares worth Rs 400 cr under its IGESL IPO arm
“The IWL Committee of the Board of Directors for Operations of the Company in their meeting held today i.e. 18 January, 2022 have accorded its approval to ...
In 2021, PE and VC investments will reach an all-time high of US$77 billion
In 2021, PE and VC investments will reach an all-time high of US$77 billion
The year saw a massive glut of liquidity across the world coming out of the pandemic, which led to higher investments in many assets and a surge in ...
Russia struggles to keep pace as OPEC+ oil supply soars
Russia struggles to keep pace as OPEC+ oil supply soars
In the booming Asian physical market, Russian premium ESPO crude — a favorite grade among Chinese processors — has already surged to the highest since ...
Show next
We will be happy to hear your thoughts

Leave a reply

Compsmag - Latest News In Tech and Business
Logo