11 October 2017

Cameroon: Financing Projects - Exim Bank China, Chinese Government Set New Conditions

The bank will henceforth participate in the execution, investment and management of cooperation projects it sponsors.

The Export-Import (Exim) Bank of China has announced a change in financing policy of Forum on China-Africa Cooperation, FOCAC projects in Cameroon. The disclosure was made on September 22, 2017 when 27African journalists visited the bank's headquarters in the Chinese capital, Beijing.

Zhang Shuo of the Concessionary Loan Department told Cameroon Tribune that the bank has decided on a new cooperation formula with Cameroon in order to reduce the country's debt burden. "It was recommended that Chinese companies not only execute Forum on China-Africa Cooperation, FOCAC projects financed by Exim Bank of China, but should henceforth participate in investing and running them," she explained. According to Zhang Shuo, the measure is meant to help raise the sense of responsibility of Chinese companies. "They will handle projects better because they are part owners," Zhang stated.

She made it clear that the shift in policy was a joint decision of the Chinese government and Exim Bank of China in order to promote Africa's development. Zhang Shuo added that the bank's support to Cameroon was one of the highest in Africa, though she did not provide any figures. From 2008 to 2017, trade between Cameroon and China reached about 2 billion US dollars (1,098 billion FCFA). Between 2008 and 2015, China granted loans to Cameroon worth 3 billion US dollars (1,648 billion FCFA), mainly for infrastructure, road construction and telecommunications development.

Briefing the journalists, Yuan Xingyong, Exim Bank of China Vice President said forecasts suggest that Africa's economy will grow by 3.4 per cent in 2017. Moreover, the continent is set to become the second fastest growing region in the world after Asia, Yuan Xingyong predicted. Reviewing Exim Bank of China's activities in Africa in the past few years, Zhang Shuo said under FOCAC, there has been an increase in concessionary loan facilities.

Loans in 2012 totalled 20 billion US dollars (10,980 billion FCFA), while 35 billion US dollars (19,215 billion FCFA) in export credits was allocated to the continent at the 2015 FOCAC summit in South Africa. Chinese investments in Africa now stand at 100 billion US dollars (54,892 billion FCFA), while 3,000 Chinese firms have been brought into the continent. Over 600 Chinese projects worth 300 billion RMB (24,985 billion FCFA) are underway in Africa, officials disclosed.

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