8 September 2018

Ethiopia Bags China Debt Deal, Others Wait

Ethiopia became the first country on the continent to have its Chinese debts restructured even as it became apparent that several other countries were waiting for loan concessions to avert distress.

On Thursday, Ethiopia announced that China had agreed to restructure some of its loans, including the one for the $4 billion railway linking its capital Addis Ababa with Djibouti.

Prime Minister Abiy Ahmed said the loans would be restructured, with a further 20-year extension, which will see its annual repayments come down to an affordable level.

It is understood that Djibouti could also be on the way to enjoying reprieve, given that its debts from Beijing were already choking it.

The country has seen its debt to GDP ratio raise 88 per cent, the latest report from Centre for Global Development shows, even as it ramps up its port infrastructure investment already running into billions of dollars.

During the summit, some African countries got a reprieve when Beijing decided to write off interest on some of their loans even as China said it was not to blame for the debt distress some of these countries found themselves in.

President Xi said that they would be writing off interest-free loans due by the end of this year for heavily indebted African countries, as well as Africa's interior and small island nations.

This statement served as a reality check for Beijing's ties with the continent, their growing appetite for its loans and the realisation of debt sustainability fears.

Chinas special envoy for Africa, Xu Jinghu said that Beijing understand the sentiments out there that they are burdening African countries with debt, but if you keenly look at the debt profiles, China is not their main creditor.

China will implement eight major initiatives with Africa in the next three years even as some previous pledges remain unfulfilled.


Ethiopia, Eritrea Deal a Reminder of The Last U.S-Brokered Peace

This month, Ethiopia reopened its embassy in Asmara, the capital of Eritrea, capping a series of historic diplomatic… Read more »

See What Everyone is Watching

Copyright © 2018 The East African. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 600 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.