4 August 2008
Abuja — African members of the International Monetary Fund (IMF) have pledged greater transparency in their dealings with China and other new investors leading a tide of money flowing into the continent.
Finance ministers and central bankers from the world's poorest continent made the pledge in a statement. The statement was issued after meetings with the IMF and World Bank on the role of non-traditional donors, of which China is by far the largest.
"African governors urged African countries to commit to ensure transparency in the negotiation of the financing agreements and in the use of resources, and make information on loans and grants from all sources available," the statement said.
The declaration in Mauritania is intended to be a set of guidelines for African countries in their agreements with China and other so-called non-traditional sources of finance.
China, Brazil and India have been tying up infrastructure or loan deals in African countries, often in return for oil, metals and other commodity resources, raising concerns among traditional lenders like the IMF and World Bank.
"It is good news that there are new sources of financing, but we have to be very careful in order that this new financial help does not destroy the original policies of the Bretton Woods institutions," IMF Managing Director Dominique Trauss-Kahn told Reuters.
The IMF has said it must examine the implications of a nine billion-dollar (N1.05 trillion) deal between China and the Democratic Republic of Congo before deciding on its own debt relief package for the Central African country.
Besides loans, deals with China often involve Chinese workers building roads and other infrastructure projects, while natural resources move the other way, in some massive deals.
However, while welcoming the new money, the African leaders stressed the importance of developing local skills and industries beyond the simple extraction and export of raw materials.
The caucus urged new development partners to "emphasise, in their investment projects, value addition, knowledge transfer, and the capacity building aspects of development assistance.
The China Development Bank had said it was "anxious" to work in agriculture and plans further farming investments on the continent, where it has granted loans worth several hundred million dollars, mostly to processing companies in East Africa.
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