Zim-China knuckle down on debt relief

21 Jun, 2020 - 00:06 0 Views
Zim-China knuckle down on debt relief Ambassador Gou Shaochun pays attention to a question by The Sunday Mail Chief Reporter Kuda Bwititi at a briefing on pronouncements by President Xi Jinping to support Africa's fight against Covid-19

The Sunday Mail

Kuda Bwititi
Chief Reporter

ZIMBABWE and China will soon begin talks to implement a directive by President Xi Jinping for Beijing to cancel financial obligations owed by African countries.

The debt relief is expected to provide the much-needed respite to Zimbabwe’s economy, which has been severely affected by Covid-19.

President Xi last week proclaimed that “China will cancel the debt of relevant African countries in the form of interest-free government loans that are due to mature by the end of 2020”.

He said African countries that are hardest hit by coronavirus and are under heavy financial stress, would receive support.

Furthermore, President Xi said in addition to cancelling debts to African countries, China would also influence the global community and financial institutions to extend the period of debt suspension to African countries that are experiencing challenges related to Covid-19.

Zimbabwe’s economy, which is undergoing structural reform, has been hard hit by coronavirus, particularly as the country has not been a beneficiary of long-term finance packages from Western international financial institutions. Latest figures show that the country’s total foreign debt stands at US$8 billion.

Responding to questions from The Sunday Mail last week, China’s chief envoy to Zimbabwe Ambassador Gou Shaochun said dialogue would be held between the two countries to ascertain how Harare can benefit from President Xi’s proclamation.

“This is a highly specialised and technical issue, which requires specific discussions between competent authorities of the two countries,” he said.

Asked how much Zimbabwe owes China, Ambassador Gou said the Chinese embassy could not readily provide figures.

Chief director for communications and advocacy in the Ministry of Finance and Economic Development Mr Clive Mphambela said Treasury would study the implications of President Xi’s pronouncements.

“This is something that our officials at the Department of International Cooperation will study and come up with a definitive position. So the process of consultation has started and our officials will also need to sit down with their Chinese counterparts.”

Mr Mphambela said previously, Zimbabwe was able to save US$50 million from debt relief offered by China.

“There is also a background to this subject because in 2015, President Xi issued a similar directive worth US$50 million to Zimbabwe,” he said.

Ambassador Gou reiterated that President Xi was sincere in his commitment to support debt relief for African countries.

“On wider China-Africa cooperation, he (President Xi) called for greater cooperation under the Belt and Road Initiative and faster follow-ups to the FOCAC Beijing Summit, giving greater priority to cooperation on public health, economic reopening and people’s livelihoods.

“He outlined measures to reduce the debt burdens of African countries within the FOCAC framework and called on the international community to act more forcefully on debt relief and suspension for Africa. Concrete proposals were also put forward to increase Africa’s capacity for sustainable development in the long run.”

Ambassador Gou said China is committed to continue supporting Zimbabwe as there are many projects that show the success of cooperation between the two countries.

“Concerning the bilateral cooperation, we always advocate pragmatism, which means aid and cooperation must be result-oriented, and the result must be visible and truly serve the development of Zimbabwe and well-being of its people,” said Ambassador Guo.

“After years of cooperation between our two countries, we have seen airports upgraded, power stations expanded, schools and hospitals constructed, thousands of boreholes drilled, and bankrupt factories revived. This is what Zimbabwe needs. They are the real examples of how China-Zimbabwe cooperation contributes to the development of the country.”

In his remarks at the virtual Extraordinary China-Africa Summit on Solidarity Against Covid-19, President Xi encouraged international financial institutions to “act more forcefully” in relieving debt for African countries.

“We encourage Chinese financial institutions to respond to the G20’s Debt Service Suspension Initiative (DSSI) and to hold friendly consultations with African countries according to market principles to work out arrangements for commercial loans with sovereign guarantees,” said President Xi.

“China will work with other members of the G20 to implement the DSSI and, on that basis, urge the G20 to extend debt service suspension further for countries concerned, including those in Africa.

“China hopes that the international community, especially developed countries and multilateral financial institutions, will act more forcefully on debt relief and suspension for Africa. China will work with the United Nations, World Health Organisation and other partners to assist Africa’s response to Covid-19, and do it in a way that respects the will of Africa.”

On Wednesday, President Mnangagwa, who is SADC chairperson for the Organ on Politics, Defence and Security Cooperation, participated in the virtual Extraordinary China-Africa Summit on Solidarity Against Covid-19, which was co-chaired by President Xi and Senegalese President Macky Sall, the incoming chairperson of the Forum on China-Africa Co-operation (FOCAC).

In his address at the summit, President Mnangagwa saluted China for helping African countries, including Zimbabwe, in confronting the coronavirus pandemic.

“We welcome the initiatives announced by President Xi to continue assisting developing countries in the fight against the pandemic. Going forward, through this platform, there is scope to explore other opportunities in research and development in public health issues, pharmaceutical and medical equipment production,” he said.

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