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China promises Africa debt relief as Xi counters aid criticism

By Bloomberg | Published Wed, September 5th 2018 at 00:00, Updated September 4th 2018 at 22:59 GMT +3

Chinese President Xi Jinping has pledged debt relief to some poor African nations, attempting to push back against a major criticism of his signature Belt and Road Initiative.

Speaking to the Forum on China-Africa Cooperation on Monday in Beijing, Xi defended the global programme to develop roads, railways, ports, pipelines and other trade links.

Aired doubts

China planned to exempt some African countries from interest-free loans due by the end of the year, Xi said, adding that the relief would be granted to unspecified poor and heavily indebted countries. He announced an additional $60 billion of loans and other financing to follow on a similar amount promised three years ago. The package includes $20 billion (Sh2 trillion) of credit lines; $15 billion (Sh1.5 trillion) of grants, interest-free loans and concessional loans; $10 billion (Sh1 trillion) for a special fund; and $5 billion (Sh500 billion) to support imports from Africa.

“We will fully honor the promises we have made to our African brothers,” Xi told the gathering. South African President Cyril Ramaphosa, Ethiopian Prime Minister Abiy Ahmed, Djibouti President Ismail Omar Guelleh, Egypt's Abdel-Fattah El-Sisi and Kenya's Uhuru Kenyatta were present.

In recent months, Beijing has faced criticism about its debt practices from countries ranging from Australia to India, with even some Chinese academics airing doubts at home. Malaysian Prime Minister Mahathir Mohamad warned against “a new version of colonialism” during a visit to Beijing last month after suspending a $20 billion (Sh2 trillion) Chinese-built rail project.

External criticism

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Shi Yinhong, a professor of international relations at Renmin University of China, said Xi emphasised both inclusiveness and a desire to ensure projects are viable. “The reason behind these changes is that China’s economy is facing new difficulties, China’s accumulating lessons in Africa and absorbing some external criticism,” Shi said.

While Beijing-backed investment has provided African governments much-needed infrastructure without the West’s political and fiscal demands, it has also generated complaints about China’s preference for loans and reluctance to use local labour. Such concerns have grown as Xi extended his Belt and Road plan across much of the globe and tied it to his ambition of completing his country’s return to great power status.

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