China to waive loans in 17 African countries

Over the last two decades, China has positioned itself as Africa's largest bilateral lender, assisting in the financing of critical infrastructure projects on the continent.

The relief was announced by Foreign Minister Wang Yi on August 18 in an address to Chinese and African diplomats.

However, the minister didn’t divulge details on the value of the loans waivered nor did it state which countries would benefit from the waiver.

Chinese Foreign Minister Wang Yi meet with Panamanian President Juan Carlos Varela on Saturday AFP

According to a 2021 report from a Nation Media Group publication, Kenya owed the third largest amount of money to China in Africa after Angola and Ethiopia.

At the time Angola led with a debt of $25 billion (Sh2.9 trillion), Ethiopia followed with $13.5 (1.6 trillion), and Kenya with $7.9 billion (Sh946 billion).

China eliminated debt owing to interest-free loans totalling $113.8 million (Sh13.6 billion) that matured in 2020 for 15 African countries including Botswana, Burundi, Rwanda, Cameroon, the Democratic Republic of the Congo, and Mozambique.

READ: 20 countries with the highest debt-to-GDP ratio in Africa

“For those African countries that are hardest hit by the coronavirus and are under heavy financial stress, China will work with the global community to give them greater support, by such means as further extending the period of debt suspension, to help them tide over the current difficulty,” President Xi Jinping.

China further called on the West to also consider cancelling debt for African countries.

Xi Jinping. 53f829d5-5b67-4586-b786-6e3d67e54c97

In the latest edition of its Sub-Saharan Africa Regional Economic Outlook which was released, the International Monetary Fund (IMF) disclosed that the ongoing war in Ukraine has exacerbated Africa's debt crisis, pushing the public debt ratios across the continent to a 20-year high.

It's important to note that many African countries' debt challenges precede the Ukraine war. Earlier this year, the World Bank raised the alarm that debt in many low-income countries (many of which are in Africa) has risen to unprecedented highs.