Little over one month after China revealed its intentions to cancel some $5.2 billion, about 3 trillion Central African CFA franc, of Cameroon’s debts, the Asian economic giant is once more considering another debt cancelation in Africa where it had pumped in millions of dollars in investment and aid.
Africanews reported that China is “considering canceling or rescheduling the Congolese debt deal.”
This should come as good news for the country with a limping economy, that is struggling to recover from the fall in global oil prices.
Quoting top Congolese government officials and the Chinese ambassador to Congo, they reported that there has been “discussion” between the two states and the Export-Import Bank of China, Exim bank.
It was gathered that negotiations towards the two states have been ongoing with an imminent signing of a cancelation or debt suspension deal expected sooner than later.
Exim bank is said to be the main creditor not only to the Congolese government but several African states where China has invested in, top among them being, Nigeria, South Africa, Zambia, and Ethiopia.
Beijing is said to holds 35% of Brazzaville’s debt. The International Monetary Fund, IMF wrote that Congo’s debt as of 2017 stood at 110% of its GDP giving a total of $9.1 billion.
Due to disparaging figures and its troubling debt situation, Congo’s Premier, Clement Mouamba, is said to have traveled to China to obtain clarification as to how much debt Congo owed China.
His visit was regarded by economic analysts as “troubling”, as they questioned why a statesman would have to travel to his creditors to get clarification on how much was loaned to his country.
In 2017, it was reported that “Hidden debts contribute to the crisis in Congo,” and even though it qualified for debt relief through the Heavily Indebted Poor Countries initiative in 2010, hopes for the economy to bounce back is “blur”.
Despite that, China continues to advance its investments. We should recall that in September of 2018, China’s President, Xi Jinping announced during the forum on China-Africa Cooperation that the Asian giant will be providing $60 billion in financial support to Africa.