While President Xi last year promised to make projects more transparent and fiscally sustainable, critics will nonetheless be alert to Beijing possibly exploiting its African partners’ financial weakness to seek bigger stakes in BRI projects during bilateral negotiations over debt relief. African Nations have problems making repayments, which report says raises ‘legitimate concerns about the sustainability of… Working Paper No. A unique professional network of China-Africa scholars, analysts, journalists and other practioners from around the world. An article in China’s state-owned Global Times said the loans are “not applicable for debt relief” due to the commercial character of the projects they finance. Rhodium’s findings were based on a database of 130 Chinese debt renegotiations from 2000 all the way up to last month. Given the new opportunities and challenges we face, closer cooperation between China and Africa is needed, more than ever,” he said. As figure 1 shows, ROC’s largest borrowing spree came between 2012 and 2014, after oil prices had breached US$ 100 per barrel. Forbes Africa Names Top 10 Richest African Artists, Leaked Sex Tape - Tanzanian Socialite to Remain in Jail. He said for those African countries that are hardest hit by the coronavirus and were under heavy financial stress, China would work with the global community to give them greater support by such means as further extending the period of debt suspension to help them tide over the current difficulty. And President Xi says China will cancel the debt of relevant African countries in the form of interest-free … For those who regard China as a predatory lender, the potential offer of debt-for-equity swaps is ominous. The new report, “Seeking Relief: China’s Overseas Debt After COVID-19,” provides insights into how China may be handling current debt restructuring talks with borrowers in Africa and elsewhere. There are in fact numerous examples of Chinese debt relief over the last two decades from which we can gain insight into the likely shape of China’s COVID-19 era debt relief. Lusaka has since borrowed more, but defaulted on payments to an Italian bank, a Russian company and other Chinese constructions firms leading to stalling of projects. Charlie Mitchell examines the prospects for …. “On my part, I will stay in close touch with all of you, my colleagues, to consolidate our friendship and mutual trust, support each other on issues involving our respective core interests, and advance the fundamental interests of China and Africa and, for that matter, of all developing countries. In return, when Africa was struck by the virus, China was the first to rush in with assistance and has since stood firm with the African people.”. CDB is well-known as one of China’s two policy banks along with China Eximbank, directly overseen by China’s State Council. Read exclusive insights on the key trends shaping China-Africa relations. A weak economy and the fallout from the pandemic has forced the South African government to break one of its cardinal rules and go to the IMF for a loan. In the past, Calvin served on the Board of the China Carbon Forum, and was the first Executive Director of the Beijing Energy Network. By Masuzyo Chakwe on June 21, 2020. Mushtak Parker reports, How true is President Magufuli’s claim that Tanzania is Covid-free? It covers news from the banking, finance, insurance, and currency sectors, as well as the latest analysis from the stock markets and capital markets. In recent years, BRI countries have cancelled or renegotiated projects over debt concerns, yet with pandemic-related financial distress, more are now asking China for flexibility over their repayment schedules, and several are understood to be African states, according to the FT. China signed up to a G-20 pledge in April to suspend debt-servicing until the end of the year, potentially freeing up 76 of the poorest countries, 40 of them in sub-Saharan Africa, to spend scarce funds on dealing with the economic damage wreaked by the health crisis. Begrudgingly Kicking the Can Down the Road, but not that Far: The case of Cameroon. Lender’s Remorse? We estimate Chinese financiers signed loan commitments totaling US$148 billion with these African borrowers between 2000 and 2018. Beyond the DSSI: “Debt Relief with Chinese Characteristics”. Moreover, Johns Hopkins University researchers have revealed that in cases they examined of African countries facing debt difficulties, there were no asset seizures. For over 45 years New African provides unparalleled insights and analysis on African politics and economics, via an African perspective. African Banker is a quarterly magazine dedicated to banking and finance in Africa. In June, President Xi said China would cancel interest-free debt owed by "relevant" African countries as part of Beijing's move to help the continent during the Covid-19 pandemic. The ROC approached the IMF for assistance, who required that the ROC restructure its debt service to sustainable levels before they would offer ROC an assistance program. Eventually, Cameroon decided to take measures into its own hands, unilaterally deciding to withhold debt service payments in January 2019 in the hopes that the payments would be folded into a relief deal. China will work with other members of the G20 to implement the DSSI and, on that basis, urge the G20 to extend debt service suspension still further for countries concerned, including those in Africa,” he said. Angola is the most indebted African country to China. “Together, we will build a China-Africa community of health for all. In 2018, Chinese President Xi Ji… There does not seem to be any standardized processes or consistent oversight body. Debt Relief with Chinese Characteristics. China shall always remember the invaluable support Africa gave us at the height of our battle with the coronavirus. G20 leaders may take action on private debts when they meet in October. According to Debtwire, a debt market consultancy, this was not easy: “[The issue with China] is that this is the first time that Beijing is going to agree to such a large debt restructuring… [While China may have committed to ensuring Congo’s debt sustainability], neither the IMF nor Beijing know what the definition of “debt sustainability” being used by either side is. The opaqueness of many BRI transactions means it can be hard to determine the nature of the risks countries are taking on. In Kenya, it is owed some $5 billion, and rating agency Moody's rated Ghana, Angola and Kenya as countries facing credit risks this year. Countries on the list of African nations with unsustainable debt loads like Mozambique and Angola risk being next in the wave of defaults expected to hit the continent, Tjønneland said. During the Extraordinary China-Africa Summit on Solidarity against COVID-19 in a speech titled “Defeating COVID-19 with Solidarity and Cooperation” via video conference from Beijing, President Xi called for more efforts to … As much as 70 percent of this debt is denominated in foreign currencies, according to S&P, though the figure is much lower for Nigeria and South Africa, which together constitute a large portion of total sub-Saharan African debt. But the DSSI is only part of the picture. China will continue to do whatever it can to support Africa’s response to COVID-19,” he said. In 2012, the IMF found that China owned 15% of Africa’s external debt, and hardly three years later roughly two-thirds of all new loans were coming from China. The IMF forecast that the economies of sub-Saharan Africa will contract by 3.2 per cent this year, “considerably worse than was anticipated in April.”. The Chinese government is developing cold feet at continued requests to forgive debt owed by African countries in what could place new pressure on the continent in the Covid-19 pandemic season. This marks the first time that China has signed on to a multilateral debt relief initiative. CHINESE President Xi Jinping says he is convinced that humanity will ultimately defeat the Coronavirus and that the Chinese and African people are poised to embrace better days ahead. 2020. (Like most Export Credit Agencies, China Eximbank often only funds a percentage of project costs, usually 85 percent, requiring a 15 percent “buy in” from the borrowing government.)