China Writes Off 23 Interest-Free Loans To 17 African Countries

Some African countries are set to benefit from China’s $10 billion International Monetary Fund (IMF) reserve while 17 other African countries will have their loans cancelled as China moves to write off debts.

This position was disclosed by the Chinese Foreign Minister, Wang Yi while speaking with select Chinese and African diplomats in a meeting of the Forum on China-Africa Cooperation (FOCAC)according to a report by Bloomberg.

The gathering was a follow-up meeting of the FOCAC that was held last November in Senegal.

China’s role in bankrolling key infrastructural projects in Africa has established the Asian giant as Africa’s largest bilateral lender.

Although details of the 17 benefiting countries and the amount were not disclosed, it was also revealed that some other countries would still benefit from the Asian superpower’s $10 billion IMF funds which serve to implement the follow-up actions of the eighth ministerial conference of FOCAC.

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

Between 2000 and 2020, governments of some African nations and Chinese lenders signed over 1,180 loan commitments worth $160 billion according to data from the China Africa Research Initiative (CARI).

Documents of the loans reveal two-third of the facility was for transport, power, and mining projects.

Angola, Zambia, Ethiopia, Kenya, and Cameroon were also noted to have borrowed the most from China in dollar terms.

While noting the high debt profile of Nigeria in relation to Chinese loans, details of the benefitting countries did not expressly reveal if Nigeria is listed as a benefiting country.

However, checks on the Debt Management Office (DMO) showed that as of March 31, 2020, the total borrowing by Nigeria from China was $3.121 billion.

This amount represents just 3.94 per cent of Nigeria’s total public debt which stands at $79.303 billion (N28,628.49 billion at USD/N361) as of March 31, 2020.

Also, the value of external sources of funds, loans from China accounted for 11.28 percent of the external debt stock of $27.67 billion on the same date.