China Writes Off Zero-Interest African Loans

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By Adedapo Adesanya

China has revealed plans to cancel the debt of some African countries that are due by the end of 2020.

The Chinese President, Mr Xi Jinping, speaking at the China-Africa summit, said his government will especially cancel loans with zero-interest rate due at the end of the year.

“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.

“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 explained further.

China further called on Western countries to also consider cancelling debt for African countries.

The President said, “China hopes that the international community, especially developed countries and multilateral financial institutions, will act more forcefully on debt relief and suspension for Africa.”

“To help Africa achieve sustainable development is what matters in the long run. China supports Africa in its effort to develop the African Continental Free Trade Area and to enhance connectivity and strengthen industrial and supply chains,” he added.

Mr Jinping also revealed that the country is seeking other ways to collaborate with countries on the continent.
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“China will explore broader cooperation with Africa in such new business forms as digital economy, smart city, clean energy, and 5G to boost Africa’s development and revitalization,” the Chinese leader said.

The Chinese leader urged Chinese financial institutions like the Export-Import Bank of China and the China Development Bank to consult to come to some arrangements with African countries.

The two banks are underwriting the Belt and Road Initiative (BRI), China’s global investment plan to become the hub of world trade.

Last week, the country announced it would delay loan repayments for 77 low-income countries, including those in Africa, as part of the G20 programme.

For the International Monetary Fund and the World Bank, several developing countries, especially in Africa, cannot face the COVID-19 pandemic without help from creditor states.

With loan repayment suspended this year, debtor countries can use the savings to support themselves in fight against the coronavirus.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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