China to cancel the debt of some African countries hard hit by Coronavirus- Xi Jingping

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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, Chinese President Xi Jingping revealed on Wednesday
Xi made the remarks in Beijing when chairing the Extraordinary China-Africa Summit on Solidarity against COVID-19, held via video link.

However, zero-interest loans make up only a small portion of Africa’s debt owed to China. From 2000 to 2017, China provided $143 billion in loans to African governments and their state-owned enterprises—the majority of which are concessional loans, credit lines, and development financing.
The Jubilee Debt Campaign—a coalition of organizations in the United Kingdom dedicated to debt relief for developing countries—has calculated that, as of 2018, around 20 percent of all African government debt is owed to China
Under the framework of the China-Africa cooperation forum, China will further extend loan payment forbearance for some countries including African countries
Stressing that solidarity and cooperation is “the most powerful weapon” in the face of COVID-19, Xi called on China and Africa to stay committed to upholding multilateralism.

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Noting that the world is undergoing profound changes unseen in a century, Xi said closer cooperation between China and Africa is needed more than ever.
He called on both sides to support each other on issues involving respective core interests and advance the fundamental interests of China and Africa as well as all developing countries.
“This way, we will be able to take the China-Africa comprehensive strategic and cooperative partnership to a greater height,” he said.

He said China supports Africa in its effort to develop the African Continental Free Trade Area and to enhance connectivity and strengthen industrial and supply chains.
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, said Xi.

‘ ‘we must stay committed to enhancing China-Africa cooperation. To cushion the impact of COVID-19, it is important to strengthen Belt and Road cooperation and accelerate the follow-ups to the FOCAC Beijing Summit. Greater priority needs to be given to cooperation on public health, economic reopening, and people’s livelihood.’’ He said
Mr. Jingping pledged to encourage Chinese financial institutions to respond to the G20’s Debt Service Suspension Initiative and to hold friendly consultations with African countries according to market principles to work out arrangements for commercial loans with sovereign guarantees.
He further said China will work with other members of the G20 to implement the DSSI and, on that basis, urge the G20 to extend debt service suspension still further for countries concerned, including those in Africa.

Forgiving zero-interest loans for poor and least-developed countries in Africa has been a tradition for China. In 2005, China announced forgiveness of $10 billion zero-interest loans for Africa. By the first quarter of 2009, China had canceled 150 such loans owed by 32 African countries. In 2018, Chinese President Xi Jinping announced forgiveness of all intergovernmental zero-interest loans for least-developed African countries with diplomatic relations with China

also read: Chinese loans to Africa: highly addictive, readily available, with long-term negative effects that far outweigh any temporary high

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