Young Journalists Club | Latest news of Iran and world

News ID: 28176
Publish Date: 9:18 - 31 August 2018
TEHRAN, August 31 - A wave of African nations looking to restructure debt with China on the eve of a major Beijing summit provides a reality check for the continent, where most countries still view Chinese lending as the best bet to develop their economies.

Despite debt woes, Africa still sees China as best bet for financingTEHRAN, Young Journalists Club (YJC) - China has denied engaging in "debt trap" diplomacy, but President Xi Jinping is likely to use next week's gathering of African leaders to offer a new round of financing, following a pledge of $60 billion at the last summit three years ago.

Ethiopia and Zambia, heavy borrowers from China, have expressed desire to restructure that debt, while bankers believe Angola and Congo Republic have already done so, though details of such deals are sparse.

The International Monetary Fund says Cameroon, Ghana and others face a high risk of debt distress, as does Djibouti, whose main source of foreign loans is China, the Fund says, and which holds the majority of external debt.

But many countries, even those heavily indebted to China, still say Beijing offers far better terms than Western banks, and that European nations and the United States fail to match its generosity.

"Especially when you go to multilaterals, it takes such a long time," Aboubakar Omar Hadi, chairman of the Djibouti Ports and Free Zones Authority, told Reuters.

To develop its Doral Container Terminal, Djibouti borrowed $268 million from seven banks at 9 percent over nine years, he said.

By comparison, its first Chinese loan was $620 million over 20 years at 2.85 percent, and it came with a seven-year grace period.

"Where is America?" he asked. "Where is the investment from Europe? We are ready.

Why are they leaving the whole continent for China? They have themselves to blame if here they are out of the game."

Source: Reuters

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