China’s Foreign Minister Qin Gang rejected accusations that the money his nation lends to Africa is a “debt trap” on his first official trip since he was appointed last month.
(Bloomberg) — China’s Foreign Minister Qin Gang rejected accusations that the money his nation lends to Africa is a “debt trap” on his first official trip since he was appointed last month.
Qin’s comments were a swipe at statements US officials have made repeatedly, criticizing China’s perceived lack of transparency regarding loans it or its companies have made to African nations. US Treasury Secretary Janet Yellen has said China is the biggest obstacle to progress in resolving debt crises.
“China’s contribution is concrete in bettering the lives of African people,” Qin said on Wednesday through an interpreter in a speech in Ethiopia, where the African Union is headquartered. “We don’t accept the unreasonable label of debt trap.”
China accounts for about 12% of Africa’s external debt of around $700 billion, with Zambia and Ghana, both of whom have defaulted on their debt obligations, among its biggest creditors on the continent, according to London-based international affairs policy institute Chatham House. Still, its lending has funded an infrastructure boom in many African nations.
Qin, citing World Bank data, said that multilateral lenders account for three quarters of Africa’s external debt and should play a bigger role in resolving payment issues. Sub-Saharan Africa’s external debt-servicing costs will likely rise 50% by 2026 from 2019 levels and as many as 18 of the continent’s 54 nations will struggle to pay what they owe, according to the Paris-based Finance for Development Lab.
During the visit Qin signed an agreement to partially forgive Ethiopia’s debt to China, according to the African country’s state broadcaster, which didn’t say how much debt would be canceled. In 2020 Ethiopia owed China about $13.7 billion, according to Chatham.
Qin also called for better relations between the US and China, the world’s two biggest economies and dominant political powers, saying the nations should cooperate and co-exist peacefully rather than compete.
“No country, no people have the right to force the African countries and people to take sides,” he said. “Africa should be a big stage for international cooperation, not an arena for major countries’ competition.”
Qin is also visiting Gabon, Angola, Benin and Egypt on his trip.
(Updates with partial debt cancellation agreement in sixth paragraph)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
