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China Forgives Part Of Congo’s Debts

Credit: Africanews

In his diplomatic visit to Congo, China’s Foreign Minister, Wang Yi, announced China’s intentions to waive parts of Kinshasa’s debt to Beijing plus fund infrastructure projects as Congo joins the Belt and Road Initiative.

This debt-relief will see the DRC not repaying its interest-free loans from China that matured at the end of 2020, Aljazeera said. “As Congo’s most reliable friend, China wishes to continue to make its contribution to Congo’s development,” Wang told the Congolese ministry. On his part, President Tshisekedi said “More Chinese companies are welcome to invest in Congo and strengthen cooperation in infrastructure and other fields.”

According to data gathered by Johns Hopkins University’s China Africa Research Initiative, Chinese entities have extended 53 loans to the Democratic Republic of the Congo between 2000 and 2018, amounting to a total of $2.4bn. Most of the lending was focused on the power, transport, and mining sectors. Congo’s exports to China surged 30 percent in 2020 compared with the previous year. The loans to be written off to DRC is worth an estimated US$28 million

According to South China Morning Post, Mark Bohlund, a senior credit research analyst at REDD Intelligence, said “the debt relief from China is welcome but will not make a material difference for DRC. If China accords more financial support, it is likely to be more piecemeal than the large announcements such as the US$9 billion Sino-Congolese agreement in 2008 and a similar deal announced with Ghana around the same time, where actual lent funds ended up being substantially smaller than initially announced.”

Africanews reported that China has extended debt relief worth over $2bn to developing under a G20 framework known as the Debt Service Suspension Initiative (DSSI). Some of the beneficiary countries include Angola, Ethiopia, Zambia, and Djibouti.

Beijing’s debt relief promises are coming at a time when African countries like Congo need financial assistance to shore up the economic havoc caused by COVID-19. Read more about this story here

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