Chinese lenders ‘reluctant’ to offer African countries further debt relief
Some creditors fear their involvement in a G20 scheme to help poorer nations has left them at a disadvantage compared with international peers
Kenya’s attempt to extend a debt freeze is thought to have met resistance from the Import-Export Bank of China
China is not trying to lead African countries into a debt trap and provides critical investment along with other countries to close a funding gap for crucial infrastructure projects on the continent, the head of the regional lender said on Friday.
Debt sustainability was a key issue at this week’s meeting hosted by Tokyo with African leaders and international lenders on development of the continent, with eyes on China’s aggressive lending that some critics say has saddled poorer African countries with mountains of debt.
African Development Bank president Akinwumi Adesina brushed aside such criticism, and urged Japan and China to not compete but play “complementary roles” in filling a massive funding gap for African infrastructure.
Chinese lenders fear they are at a disadvantage. Photo: Shutterstock
Chinese lenders
may not be willing to throw good money after bad loans
and have reportedly declined to approve a further freeze on debt repayment for some countries.
China, the largest bilateral lender in Africa
, has said its commercial lenders should not be forced to provide debt relief and criticised the International Monetary Fund and the World Bank for not doing enough to ease the debt burden.
Some Chinese lenders have also said they are disadvantaged compared with those from other countries – especially in the Group of 20’s Debt Service Suspension Initiative (DSSI), which was introduced last year to help poor nations fight Covid-19.