China will forgive 23 loans to 17 African countries, Chinese Foreign Minister Wang Yi announced.
“China will waive 23 interest-free loans for 17 African countries that had expired by the end of 2021,” Wang said at the Forum on China-Africa Cooperation according to a statement.
He pledged that China will continue to support and actively participate in the construction of major infrastructure projects in Africa through financing, investment and assistance.
“We will also continue to increase imports from Africa, support the further development of Africa’s agricultural and manufacturing sectors, and expand cooperation in emerging industries such as the digital economy, health, green and low carbon”.
Wang also pledged that China would provide food aid to the 17 African nations.
Critics say China is embroiled in “debt trap diplomacy”, alleging the country is granting loans in order to secure strategic international assets over time.
The South Asian country of Sri Lanka has awarded China Merchants Ports Holdings a 99-year lease on the Chinese-built $1.5 billion (A$2 billion) deep-water port of Hambantota in 2017 after falling deeply into debt.
Kenya, South Africa and Uganda are among the many African states that have borrowed heavily from Chinese lenders.
According to 2020 World Bank data cited by ForbesAfrican countries with the highest external debt to China as a percentage of gross national income are Djibouti (43%), Angola (41%) and the Democratic Republic of Congo (29%).
African countries have also enthusiastically joined China’s transcontinental Belt and Road Initiative to build port, rail and land infrastructure, the modern Beijing Silk Road.
Australia has canceled a deal between Victoria and China for the Belt and Road Initiative infrastructure in 2021, calling it “inconsistent with Australian foreign policy”.
But the concept of a Chinese “debt trap” has also come under fire, with a 2020 study finding that China had restructured or refinanced around $21 billion of debt in Africa between 2000 and 2019. The study also noted that there was no evidence of “asset seizures”. “and that Chinese lenders had not used the courts to enforce payments, nor applied penalty interest rates to troubled borrowers.
Meanwhile, Angola’s presidential candidate Adalberto Costa Junior has pledged to review the country’s debt if elected.
Angola owes about $90 billion, which will cost it about $8 billion each year in amortization, according to Bloomberg.
“The amount of actual foreign debt is not known,” Junior said in an interview over the weekend.
Around $27 billion of Angola’s total debt is owed to China, with the funds being used to build roads, hospitals and rail links.
Mr Junior warned that any borrowing unrelated to infrastructure projects could be renegotiated.