Some Debt Trap! China Forgives 23 Unpaid Loans to 17 African Nations, Readies $10 Billion in Credit

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Some Debt Trap! China Forgives 23 Unpaid Loans to 17 African Nations, Readies $10 Billion in Credit

Some Debt Trap! China Forgives 23 Unpaid Loans to 17 African Nations, Readies $10 Billion in Credit

Chinese Foreign Minister and State Councilor Wang Yi recently revealed that Beijing would forgive a substantial amount of debt owed to its financial… 2022.08.25, Sputnik International

2022-08-25T18:43+0000

2022-08-25T18:43+0000

2022-08-25T18:43+0000

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The Chinese Foreign Ministry announced on August 18 at the Coordinators’ Meeting on the Implementation of the Follow-up Actions of the Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in Beijing. Among other actions, it said that “China will waive 23 interest-free loans for 17 African countries that matured by the end of 2021.” However, the announcement did not state the volume of debt that had been forgiven.Debt forgiveness has been a regular feature of China’s financial relationship with Africa, and because it refuses to meddle in the political affairs of its lender nations, China is rapidly becoming the lender of choice on the continent. of letters on zero tariff for 98% of their export items to China. Chinese companies have invested [an] additional $2.17 billion in Africa. The Chinese side is prepared to re-channel, through the International Monetary Fund (IMF)’s Poverty Reduction and Growth Trust and Resilience and Sustainability Trust, $10 billion of its Special Drawing Rights to Africa, and will encourage the IMF to direct China’s contributions to Africa,” he added. Wang said that China’s cooperation with African nations is “entirely based on Africa’s needs” and that Beijing does not seek to establish spheres of influence. Instead, Beijing seeks “to enhance capacity for independent development and improve people’s livelihoods.” tour,” except that she told African nations that they cannot trade with Russia because of Western sanctions.Days later, US Secretary of State Antony Blinken visited three African nations in what Washington plainly said was an attempt to bring nations edging toward Moscow back into the US fold. However, South Africa threw his words back in his face, with Foreign Minister Naledi Pandor telling him that the US should be “equally concerned at what is happening to the people of Palestine, as we are with what is happening to the people of Ukraine. “At the start of the year, Wang made his own tour of several African nations, stopping in Eritrea, a country under heavy US sanction as punishment for refusing to cooperate with US Africa Command (AFRICOM) and for making peace with Ethiopian Prime Minister Abiy Ahmed, to speak out against coercive sanctions.One-Sided CriticismWestern governments and media have tried to demonize China’s and Russia’s growing involvement in African affairs, claiming they pose a threat to both African and Western interests with predatory loans in the case of China, and so-called mercenaries in the case of Russia. They claim these actions compel African nations to support them, sometimes via secret contract clauses. It is likely no coincidence that this narrative arose as Washington announced it was reorienting its global strategy toward “great power competition” with Russia and China. Western experts are already trying to spin the debt forgiveness to reinforce their anti-China narratives. Harry Verhoeven, the senior research scholar at Columbia University, told the US state-owned outlet Voice of America that China’s decision was an attempt to “push back” on “the overall debt-trap diplomacy narrative” having realized that such allegations are “a bit of a PR nightmare.” At the FOCAC meeting, Wang also called attention to the other ways in which China has shown solidarity with African nations. He noted that China has provided 189 million doses of COVID-19 vaccines to 27 African countries, and that joint production of vaccines in Africa, the world’s least vaccinated continent, has exceeded an annual capacity of 400 million doses. He also recalled the many other medical partnerships in operation or development, including upgrading the China-Guinea Friendship Hospital in Conakry and preparing similar upgrades for facilities in South Sudan, the Central African Republic, Chad, and Malawi.

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Chinese Foreign Minister and State Councilor Wang Yi recently revealed that Beijing would forgive a substantial amount of debt owed to its financial institutions by African nations. China has been accused by Western powers of predatory lending to poorer and using their debts to compel them to adopt pro-ijing positions.

The Chinese Foreign Ministry announced on August 18 at the Coordinators’ Meeting on the Implementation of the Follow-up Actions of the Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in Beijing. Among other actions, it said that “China will waive 23 interest-free loans for 17 African countries that matured by the end of 2021.”

However, the announcement did not state the volume of debt that had been forgiven.

Debt forgiveness has been a regular feature of China’s financial relationship with Africa, and because it refuses to meddle in the political affairs of its lender nations, China is rapidly becoming the lender of choice on the continent.
“Over the past half a year, over $3 billion out of the $10 billion of credit facilities pledged to African financial institutions has been delivered, and nearly $2.5 billion of loans have been channeled to Africa’s priority programs,” said Wang, who chaired the FOCAC meeting. “More than $2 billion of the $10 billion of trade finance has been allocated, and China’s import of African goods in 7 months has reached $70.6 billion.”

“So far this year, China has signed with 12 African countries exchanges of letters on zero tariff for 98% of their export items to China. Chinese companies have invested [an] additional $2.17 billion in Africa. The Chinese side is prepared to re-channel, through the International Monetary Fund (IMF)’s Poverty Reduction and Growth Trust and Resilience and Sustainability Trust, $10 billion of its Special Drawing Rights to Africa, and will encourage the IMF to direct China’s contributions to Africa,” he added.

Wang said that China’s cooperation with African nations is “entirely based on Africa’s needs” and that Beijing does not seek to establish spheres of influence. Instead, Beijing seeks “to enhance capacity for independent development and improve people’s livelihoods.”

US Tries to Rein In Africa

Wang’s comments come after US Ambassador to the United Nations Linda Thomas-Greenfield traveled to Uganda earlier this month on what she claimed was a “listening tour,” except that she told African nations that they cannot trade with Russia because of Western sanctions.

“We caution countries not to break those sanctions,” Thomas-Greenfield saidbecause then “they stand the chance of having actions taken against them.”
Days later, US Secretary of State Antony Blinken visited three African nations in what Washington plainly said was an attempt to bring nations edging toward Moscow back into the US fold. However, South Africa threw his words back in his face, with Foreign Minister Naledi Pandor telling him that the US should be “equally concerned at what is happening to the people of Palestine, as we are with what is happening to the people of Ukraine. “
At the start of the year, Wang made his own tour of several African nations, stopping in Eritrea, a country under heavy US sanction as punishment for refusing to cooperate with US Africa Command (AFRICOM) and for making peace with Ethiopian Prime Minister Abiy Ahmed , to speak out against coercive sanctions.

One-Sided Criticism

Western governments and media have tried to demonize China’s and Russia’s growing involvement in African affairs, claiming they pose a threat to both African and Western interests with predatory loans in the case of China, and so-called mercenaries in the case of Russia. They claim these actions compel African nations to support them, sometimes via secret contract clauses. It is likely no coincidence that this narrative arose as Washington announced it was reorienting its global strategy toward “great power competition” with Russia and China.

Such criticism is scarce to be found when the International Monetary Fund (IMF), a US-dominated financial institution based in Brussels, Belgium, compels African nations to accept neo-liberal economic restructuring programs as a condition for being given emergency loans. Or, when one US-trained officer corps after another mounts a coup d’etat, often in nations suffering economic and social malaise due to their governments’ social services being stripped down as a consequence of accepting IMF loans. This, they say, is business.

Western experts are already trying to spin the debt forgiveness to reinforce their anti-China narratives. Harry Verhoeven, the senior research scholar at Columbia University, told the US state-owned outlet Voice of America that China’s decision was an attempt to “push back” on “the overall debt-trap diplomacy narrative” having realized that such allegations are “a bit of a PR nightmare.”
At the FOCAC meeting, Wang also called attention to the other ways in which China has shown solidarity with African nations. He noted that China has provided 189 million doses of COVID-19 vaccines to 27 African countries, and that joint production of vaccines in Africa, the world’s least vaccinated continent, has exceeded an annual capacity of 400 million doses. He also recalled the many other medical partnerships in operation or development, including upgrading the China-Guinea Friendship Hospital in Conakry and preparing similar upgrades for facilities in South Sudan, the Central African Republic, Chad, and Malawi.

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