African nations should scrutinize Chinese loans before accepting them, IMF chief says

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Capital flows from China are important for development, but African nations should ensure that the loans are favorable for Africa, an expert at the International Monetary Fund said on Wednesday.

TOBIAS ADRIAN, Financial Counselor and Director Monetary and Capital Markets Department of the International Monetary Fund, addresses journalists on the GLOBAL FINANCIAL STABILITY REPORT (GFSR) at the IMF Headquarters in Washington DC on Wednesday, April 10, 2019. Photo: EMMANUEL IKODOR, TODAY NEWS AFRICA.

Mr Tobias Adrian, a financial counselor and director of the monetary and capital markets department at the International Monetary Fund, was speaking at a press briefing on the Global Financial Stability Report in Washington D.C.

TOBIAS ADRIAN, Financial Counselor and Director Monetary and Capital Markets Department of the International Monetary Fund, addresses journalists on the GLOBAL FINANCIAL STABILITY REPORT (GFSR) along side FABIO NATALUCCI, Deputy Director, Monetary and Capital Markets Department IMF, ANNA ILYINA, Division Chief, Monetary and Capital Markets Department IMF, PETER BREUER, Deputy Division Chief, Monetary and Capital Market of the IMF and RANDA ELNAGAR, Communications Officer IMF at the IMF Headquarters in Washington DC on Wednesday, April 10, 2019. Photo: EMMANUEL IKODOR, TODAY NEWS AFRICA.

“We urge countries to ensure that when they borrow from abroad that the terms are favorable for the borrower,” he said in response to a question from TODAY NEWS AFRICA’s Simon Ateba on the risk posed by Chinese loans given to corrupt and unaccountable governments in Sub-Saharan Africa.

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TOBIAS ADRIAN, Financial Counselor and Director Monetary and Capital Markets Department of the International Monetary Fund, addresses journalists on the GLOBAL FINANCIAL STABILITY REPORT (GFSR) at the IMF Headquarters in Washington DC on Wednesday, April 10, 2019. Photo: EMMANUEL IKODOR, TODAY NEWS AFRICA.

The briefing took place during IMF and World Bank Spring Meetings which started on Monday and would end on Sunday.

ANNA ILYINA, Division Chief, Monetary and Capital Markets Department of the International Monetary Fund, addresses journalists on the GLOBAL FINANCIAL STABILITY REPORT (GFSR) at the IMF Headquarters in Washington DC on Wednesday, April 10, 2019. Photo: EMMANUEL IKODOR, TODAY NEWS AFRICA.

“In particular, we tend to recommend that loans to countries should be conforming to Paris Club arrangements. And that is not always the case in the case of the loans from China,” Adrian added.

PETER BREUER, Deputy Division Chief, Monetary and Capital Market of the International Monetary Fund, take questions from journalists on the GLOBAL FINANCIAL STABILITY REPORT (GFSR) at the IMF Headquarters in Washington DC on Wednesday, April 10, 2019. Photo: EMMANUEL IKODOR, TODAY NEWS AFRICA.

He said African nations should ensure that capital flows are channeled to productive sources, adding that the IMF was concerned that good governance remained an issue in Africa and elsewhere and was “focused on that issue”.

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FABIO NATALUCCI, Deputy Director, Monetary and Capital Markets Department of the International Monetary Fund, addresses journalists on the GLOBAL FINANCIAL STABILITY REPORT (GFSR) at the IMF Headquarters in Washington DC on Wednesday, April 10, 2019. Photo: EMMANUEL IKODOR, TODAY NEWS AFRICA.
Simon Ateba Washington DC
Simon Ateba
Simon Ateba covers the White House, the U.S. government, the International Monetary Fund, the World Bank and other financial and international institutions for Today News Africa in Washington D.C. Simon can be reached on simonateba@todaynewsafrica.com

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