Xi did not say which African countries would be exempt or how much debt would be completely written off.
“People are undergoing profound changes that are not visible in a century,” said Xi. “Given the new opportunities and challenges we face, closer cooperation is needed between China and Africa than ever before.”
A fraction of what Africa owes
The Chinese leader also promised that his country would provide “greater support” to African countries that have been hit hardest by the virus or are under economic pressure. He suggested that China could give countries more time to repay other debts, for example.
Xi’s announcement comes as the corona pandemic causes significant difficulty in some of the world’s most underdeveloped countries, including those in Africa – and pressure is being put on creditors to enter. The International Monetary Fund and the World Bank, for example, are urging creditors to suspend debt repayment from Africa as a way to support some of the continent’s poorest countries as they struggle with the effects of the outbreak.
However, analysts said interest-free loans were only part of the debt owed by African countries to China. The CARI report completed less than 5%.
In the early 2000s, such arrangements “accounted for a significant proportion of Chinese loans,” the report said. “However, as other sources of funding from China began to increase … [interest-free loans] became a smaller and smaller percentage of China’s total debt to Africa. “
The cancellation of the African debt is also not new to China. China has written off at least $ 3.4 billion in African debt since 2000 and 2019, according to CARI – mostly in mature, interest-free foreign aid loans that had gone bankrupt.
But the “vast majority” of China’s loans has recently expanded to Africa – including favorable and commercial loans – has never been considered for cancellation, the report added.
An important ally
Xi’s announcement may be more about politics than forgiving significant amounts of debt. The president has in recent weeks he has maintained his country’s diplomatic ties with Africa as a key foreign policy strategy, as he faces a reaction between some western democracies over the handling of the corona pandemic.
However, the relationship between China and Africa was not entirely smooth. In April, Africans in the southern Chinese city of Guangzhou told CNN they had been evicted from their homes by their owners and removed from hotels as China’s warnings against imported corona cases provoked anti-foreign sentiment. Chinese officials said at the time that the country had “zero tolerance for discreet words and actions”, and that “China and African countries have always supported each other and have always fought the virus together.”
And the decision to forgive the debt comes at a difficult time for China’s economy, which earlier this year shrank for the first time in decades.
However, Xi said that strengthening the Belt and Road initiative is important after the pandemic and reiterated that China and Africa share a “long-term friendship”.
“Regardless of how the international landscape develops, China will never remain determined to seek greater solidarity and cooperation with Africa,” Xi said, adding that Beijing would continue to provide African nations with medical supplies. to help them build hospitals and even allow Some countries are among the first Covid-19 vaccines to be accepted if China completes one.
– Jenni Marsh contributed to this report.