China to forgive 23 ‘belt and road’ loans to 17 African countries — Pinsent Masons

Chi­na will con­tin­ue to help with the con­struc­tion of major infra­struc­ture projects in Africa via financ­ing, invest­ment and assis­tance, the min­is­ter said in a speech at a recent meet­ing of the Chi­na-Africa coop­er­a­tion forum.
The coun­try will also be increas­ing imports from Africa, help­ing to devel­op Africa’s agri­cul­tur­al and man­u­fac­tur­ing sec­tors, and expand­ing co-oper­a­tion in emerg­ing indus­tries such as the dig­i­tal econ­o­my, health, and green and low-car­bon sectors.
The lat­est announce­ment fol­lows China’s can­cel­la­tion of at least 94 inter­est-free loans amount­ing to over US$3.4 bil­lion in Africa between 2000 and 2019.
Finance expert Kanyi Lui of Pin­sent Masons said: “Chi­na has been for­giv­ing inter­est-free loans made to devel­op­ing coun­tries for almost half a cen­tu­ry. When many African coun­tries expe­ri­enced debt dis­tress in the 1980s to 1990s, Chi­na for­gave over 85% of inter­est free loans then out­stand­ing. This lat­est announce­ment shows China’s con­tin­ued lead­er­ship in work­ing with devel­op­ing coun­tries in debt distress.” 
“As the BRI [Belt and Road Ini­tia­tive] starts to shift its focus from mega infra­struc­ture projects to ‘small and beau­ti­ful’ projects which focus on sus­tain­abil­i­ty, rais­ing liv­ing stan­dards and social impact, devel­op­ing coun­tries would do well to care­ful­ly con­sid­er their own their inter­ests and devel­op­men­tal needs and how to engage with Chi­na in a man­ner that would max­imise the wel­fare of their peo­ple,” he said.
As of 2020, the African nations with the high­est exter­nal debt to Chi­na as a per­cent­age of gross nation­al income are Dji­bouti (43%), Ango­la (41%) and the Demo­c­ra­t­ic Repub­lic of Con­go (29%), accord­ing to World Bank data cit­ed in press reports.