African lender says China is not trying to lead region into “debt trap”
YOKOHAMA, Japan (Reuters) – China is not trying to drag African countries into a debt trap and is providing critical investments with other countries to close a funding gap for critical infrastructure projects on the continent, the head of the regional lender said on Friday.
Debt sustainability was a key issue at this week’s Tokyo-hosted meeting with African leaders and international lenders on the continent’s development, with an eye on China’s aggressive lending which some critics have said have burdened the poorest African countries with mountains of debt.
The president of the African Development Bank, Akinwumi Adesina, dismissed these criticisms and urged Japan and China not to compete with each other but to play “complementary roles” to fill a huge financing gap for African infrastructure.
“I don’t think China has a deliberate plan to indebt a country at all. I think China plays a very important role, which is in terms of supporting infrastructure, ”Adesina told Reuters. “Africa is not in a debt crisis.
Japan nonetheless sees its regional rival as an influential competitor in the world, including in Africa, and fears that an influx of Chinese money will weaken its diplomatic position.
Africa today has a funding gap of $ 68 billion to $ 108 billion per year for electricity, ports, railways and airports, he added.
At the Tokyo International Conference on African Development (TICAD), Prime Minister Shinzo Abe on Wednesday announced that Japan will establish trade insurance to boost private investment in Africa. At the last TICAD meeting in 2016, Japan pledged $ 30 billion in public and private support for infrastructure development, education and health over three years.
Japan’s investment is insignificant compared to China.
Since the launch of the Forum on China-Africa Cooperation in 2000, Beijing has stepped up aid to Africa, and President Xi Jinping announced an additional $ 60 billion over the next three years last September.
Japan is focused on high quality infrastructure investments in Africa with the aim of differentiating itself from China.
“I don’t see any competition at all, I see a complementarity. Africa has enormous needs. Africa is the friend of China, Africa is the friend of Japan. The China Belt and Road Initiative is greatly appreciated, ”he said, adding that many will be used to finance transport corridors, rail and port projects.
Chinese officials said the Beijing summit aimed to strengthen Africa’s role in its Belt and Road initiative to connect China by sea and land with Southeast and Central Asia, in the Middle East and Africa.
Some critics say that China is keen on extracting resources from the poorest countries to feed its economy, that the projects it finances have poor environmental guarantees, and that too many workers have flown from China rather than flying in from China. ” use local labor.
“China’s interest and engagement in Africa is welcome. Am I to say there was no mistake at the start, no I wouldn’t say it, ”Adesina said. “There are issues of sensitivity to local communities, there are issues to make sure you don’t move people out of the workforce, but it’s a learning curve for China.”
The International Monetary Fund says Cameroon, Ghana and others face a high risk of debt distress, as does Djibouti, which is already home to the People’s Liberation Army’s first overseas base.
Additional reports from Kwiyeon Ha; Editing by Kim Coghill