China’s waiver of African interest-free loans worth 1% or less of its lending to continent-study

By Rachel Savage

LONDON (Reuters) – China’s waiver of 23 interest-free loans to African international locations final month amounted to only one.1% or much less of Chinese language lending to the continent, a examine confirmed on Monday.

China’s international ministry mentioned in August it had cancelled 23 loans to 17 African international locations that matured in 2021, however didn’t give additional particulars.

The waived loans have been of 10 to 30-year maturities and have been price as much as $610 million in complete, researchers at Boston College estimated, utilizing a database of Chinese language state lending compiled by researchers.

China has waived some loans to African international locations since 2000 when it cancelled loans made within the Nineteen Eighties and Nineties, though it usually takes a tougher stance on restructuring lending to creating nations beneath its Belt and Street Initiative (BRI) launched in 2013, analysts say.

Chinese language state-owned lenders dedicated to $53.8 billion of loans to Africa between 2000 and 2012, in line with the Boston College database, which tracks loans made since 2000, so the loans cancelled final month accounted for a tiny portion.

“(Curiosity-free mortgage) provision and cancellation are necessary diplomatic and symbolic instruments in China’s lending practices,” mentioned the report, by Jyhjong Hwang and Oyintarelado Moses.

They added that the loans are “extra akin to international coverage devices than backside line-oriented monetary devices”.

Curiosity-free loans from China to Africa, which have included funding for presidency buildings, stadiums and hospitals, are normally handled like grants, in line with researchers and African authorities officers.

(Reporting by Rachel Savage; Further reporting by Martin Quin Pollard and Yew Lun Tian in Beijing; Enhancing by Susan Fenton)