China pledges $60bn financing for Africa, says funds not for ‘vanity projects’

Sep 04, 2018

China has pledge a total of $60 billion financial support for projects in Africa, Chinese President, Xi Jinping, announced on Monday.

The President, who made the announcement while speaking at the opening ceremony of the 2018 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) in China, said the funds are not for “vanity projects” but for building infrastructure that can remove development bottlenecks.

The President said the financing would be provided in the form of governance assistance as well as investment and financing by financial institutions and companies.

“China does not interfere in Africa’s internal affairs and does not impose its own will on Africa.

“What we value is the sharing of development experience and the support we can offer to Africa’s national development and prosperity,” Xi said.

He stated that government debt from China’s interest free loans due by the end of 2018 would be written off for indebted poor African countries as well as for developing nations in the continent’s interior and small island nations.

According to a data from China-Africa Research Initiative at Washington’s Johns Hopkins University School of Advanced International Studies, the Asian nation has extended about $136 billion in loans to Africa between 2000 and 2017.

With the new $60 billion financing, the total loans extended to the nation in the last eighteen years is now $196 billion.

The new financing will include $15 billion of aid, interest-free loans and concessional loans, a credit line of $20 billion, a $10 billion special fund for China-Africa development, and a $5 billion special fund for imports from Africa, according to Xi.

He further noted that Chinese companies would be encouraged to invest $10 billion in the continent in the next three years.

International organisations have expressed worry over the latest pledge by China for Africa, noting such loans would further sink nations within the continent under massive debt.

However, the country denied it engagement in “debt trap” diplomacy, adding that the continent still needs debt-funded infrastructure development.

“I also hope you will do more in staff training and bettering lives for the local people and will put more emphasis on the environment and resources,” he added.

 

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