China, Africa’s largest bilateral lender has unveiled a minor debt relief package for 17 African countries, writing off 23 interest-free loans that came due at the end of the last year. The loans amount to $10 billion.
China, however, neither provided details on the value of the loans, nor the countries which will benefit from the waiver.
Further, the lender will rechannel its $10 billion special drawing rights in IMF to Africa and also to provide new food assistance to 17 African countries in need this year.
This means the bilateral lender will offset the loans for the said-African countries to the IMF with its own reserves, thus increasing the debt ceiling. The targeted African countries will then be able to borrow more from the IMF.
Chinese financiers and African governments signed over 1,180 loan commitments worth $160 billion between 2000 and 2020, the China Africa Research Initiative’s (CARI) database shows, two-thirds being for transport, power, and mining projects. Angola, Zambia, Ethiopia, Kenya, and Cameroon have borrowed the most from China in dollar terms.
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