China waives 23 interest-free loans for 17 African countries

Africa, Asia-Pacific, News August 26, 2022 , by IRIA No Comments

China, Africa’s largest bilateral lender, waived 23 interest-free loans owed by 17 different African countries. The loans had matured in 2021 as many countries were unable to pay.

The announcement for the waiver of loans came from China’s Foreign Minister Wang Yi on August 18, during the Forum on China-Africa Cooperation (FOCAC) in Dakar, Senegal. According to an official statement released by the Chinese Ministry of Foreign Affairs, Wang Yi announced the waiver without specifying the the countries or amount of debt that is being waived. He said that “China will waive the 23 interest-free loans for 17 African countries that had matured by the end of 2021.”

Wang further added that “We will also continue to increase imports from Africa, support the greater development of Africa’s agricultural and manufacturing sectors, and expand cooperation in emerging industries such as the digital economy, health, green and low-carbon sectors.”

The context of the current waiver of loans was described by Wang Yi as China’s effort to counter the Western bullying of Africa. He stated during his address that such action sends a strong message of China’s support to its long-term development partner in Africa, especially “in the face of the various forms of hegemonic and bullying practices.”

The Chinese foreign minister stressed that “What Africa wishes for is a favorable and amicable cooperation environment, not the zero-sum Cold War mentality.”

This is not the first time that Beijing has announced to forgive interest-free debts, especially for African countries. China has announced multiple rounds of loan cancellation for African countries since 2000. According to a study, China had forgiven at least $3.9 billion worth of debt for Africa until 2019.

Since the last summit of the Forum on China-Africa Cooperation (FOCAC) took place in 2021, China has delivered more than $3 billion in credit to African institutions and plans to deliver more than $10 billion worth of loans to different African countries in the coming years.

*^{Chinese State Councilor and Foreign Minister Wang Yi. (Image Credit: Chinese Ministry of Foreign Affairs)}*

Wang Yi also stated that China plans to expand imports from 12 African countries. He stated that “So far this year, China has signed exchange of letters with 12 African countries on zero tariffs for 98% of their export items to China. We have provided emergency food assistance to Djibouti, Ethiopia, Somalia, and Eritrea. More African agricultural produce has reached the Chinese market through the green lanes.”

Wang pledged that Chinese investment in Africa would support the ‘Great Green Wall’ against climate change. He said that China aims to reinforced a core tenet of relations between both parties, “China will continue to support solving African issues in the African way. We oppose interference by outside forces in African countries’ internal affairs, and oppose stoking confrontation and conflict in Africa.” He said during his speech.