China Promises to Forgive 23 Interest-Free Loans For 17 African Countries

China Promises to Forgive 23 Interest-Free Loans For 17 African Countries

  • China has pledged to provide debt forgiveness for 23 interest-free loans to 17 African countries, according to a recent statement
  • The Chinese Foreign Minister, Yi stated that the move is to ensure a more robust relationship with Africa
  • Partly, the statement said that the Asian country will continue to support Africa's infrastructural development

China has pledged to forgive about 23 matured interest-free loans for 17 countries in Africa.

Chinese foreign minister Yi said this during an address at Forum China-Africa Cooperation and said the gesture is a demonstration to foster a stronger economic bond with Africa.

China, Debt forgiveness, Africa
Chinese President, Xi Jing Ping Credit: Kyodo News / Contributor
Source: Getty Images

African countries with high debt exposure to China

The foreign minister stated that this shows how much the Chinese government keeps its words on African development with tangible action.

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The statement did not name eligible countries. Still, Business Insider cites Djibouti, Angola, the DRC, Kenya and Uganda are touted to be among the countries with high debt exposure to China.

According to a report by Nairametrics, the address by Yi says there are other specific ways China wants to aid Africa to support it going forward.

The Asian giant will continue to provide support to Africa's effort to uplift its infrastructure by giving funding and investment aid under the Chinese government's transcontinental Belt and Road Initiative.

The country will also provide emergency food assistance to 17 countries in Africa in critical need this year.

China to rev up imports from Africa

The statement partly said that China would increase its imports from Africa by aiding the continent's agricultural and manufacturing sectors and cooperation in growing industries like the digital economy and health, green and low-carbon sectors.

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Also, the country said it will re-focus the $10 billion of its Special Drawing Rights SDR to Africa via the IMF.

Reports have shown that many African countries owe three times more debts to Western banks than Chinese banks.

List of 34 heavily indebted African countries, according to World Bank reported that according to Business Insider, 34 poor countries in Africa are heavily indebted. The list is a joint initiative of the World Bank and the International Monetary Fund (IMF). The initiative was launched in 1996.

Information from the IMF Fact Sheet says the initiative wants to ensure that no poor country ever faces a debt burden that it cannot manage.

The debt relief efforts work via multi-faceted financial organisations such as the global lenders and they partner with the governments of poorer countries to lower and dip external debts to manageable levels.


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