Chinese President Xi Ping Announces $60bn financing for Africa

2018 China-Africa Cooperation (FOCAC) Summit Set for 3rd September

Should Africa be wary of Chinese debt?

Chinese workers in Kenya
Image copyrightAFP

African countries have shown a healthy appetite for Chinese loans but some experts now worry that the continent is gorging on debt, and could soon choke.

The Entebbe-Kampala Expressway is still something of a tourist attraction for Ugandans, nearly three months after it opened.

The 51km (31 mile), four-lane highway that connects the country’s capital to the Entebbe International Airport was built by a Chinese company using a $476m (£366m) loan from the China Exim Bank.

It has cut what was a torturous two-hour journey through some of Africa’s worst traffic into a scenic 45-minute drive into the East Africa nation’s capital.

Entebbe-Kampala Expressway
Image captionThe new expressway was financed with millions of dollars from China

Uganda has taken $3bn of Chinese loans as part of a wider trend that Kampala-based economist Ramathan Ggoobi calls its “unrivalled willingness to avail unconditional capital to Africa”.

SUMMIT: China announces $60bn financing for Africa

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China’s President Xi Jinping speaks during the opening ceremony of the of high-level dialogue between Chinese and African leaders and business and industry representatives ahead of the 6th Forum of China-Africa Cooperation at the Beijing National Convention Centre in Beijing on September 3, 2018. / AFP PHOTO / POOL / Lintao Zhang / “The erroneous mention[s] appearing in the metadata of this photo by Lintao Zhang has been modified in AFP systems in the following manner: [opening ceremony of the of high-level dialogue between Chinese and African leaders and business and industry representatives] instead of [opening ceremony of forum]. Please immediately remove the erroneous mention[s] from all your online services and delete it (them) from your servers. If you have been authorized by AFP to distribute it (them) to third parties, please ensure that the same actions are carried out by them. Failure to promptly comply with these instructions will entail liability on your part for any continued or post notification usage. Therefore we thank you very much for all your attention and prompt action. We are sorry for the inconvenience this notification may cause and remain at your disposal for any further information you may require.
China will extend a total of 60 billion U.S. dollars of financing to Africa, Chinese President Xi Jinping announced Monday.

The financing will be provided in the form of government assistance as well as investment and financing by financial institutions and companies, Xi said in a keynote speech at the opening ceremony of the 2018 Beijing Summit of the Forum on China-Africa Cooperation.

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He also said that China will exempt certain African countries from outstanding debts incurred in the form of interest-free Chinese government loans due by the end of 2018.

The exemption, he said, will be granted to Africa’s least developed countries, heavily indebted and poor countries, landlocked and small island developing countries that have diplomatic relations with China.

Xi also said China will implement eight major initiatives with African countries in the next three years and beyond.

He said the initiatives, cover fields such as industrial promotion, infrastructure connectivity, trade facilitation, and green development.

The SGR cargo train in Kenya is one of the projects financed by China in Africa [AP]
The SGR cargo train in Kenya is one of the projects financed by China in Africa [AP]

African leaders gather for a two-day summit in Beijing focused on economic ties with China amid increasing criticism of its debt-laden approach to aid in the developing world.

President Xi Jinping hosts leaders from more than 50 African countries for the Forum on China-Africa Cooperation starting on Monday.

The once-every-three-year conference typically sees China dole out large loan packages for the continent. Xi announced $60bn in assistance and loans for Africa during the last summit in Johannesburg, South Africa, in 2015.

 

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Crimson Tazvinzwa

GRADUATE STUDENT: MASTERS OF LAWS, DE MONTFORT UNIVERSITY, http://dmu.ac.uk/ SCHOOL OF BUSINESS & LAWS, LEICESTER.

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