Tue, 16 Aug 2022

China dismisses "debt trap" allegations in Kenya

Xinhua
04 Jul 2022, 14:30 GMT+10

NAIROBI, July 4 (Xinhua) -- China on Sunday disputed the "debt trap" claim in Kenya, noting that not a single African country has slid into debt predicaments because of financing arrangements with Beijing.

Chinese Ambassador to Kenya Zhou Pingjian said in a commentary published in the Sunday Standard newspaper that the East African nation owes less than 10 percent of its public debt, or, less than 20 percent of its foreign debt, to Chinese creditors.

"Therefore, labelling China as Kenya's main creditor is an overstatement," said the article.

Zhou said that Western investors, often in the forms of multilateral financial institutions and commercial creditors, are the largest creditors of African countries, including Kenya.

The Chinese envoy stressed that China has never attached any political strings to debt agreements, nor forced any African country to take out loans or pressed for debt service by any African country.

He added that not a single developing country has ever fallen into the so-called "debt trap" because of Chinese loans.

"In fact, the so-called 'debt trap' is a narrative trap created by those who wish to forever plunge Africa into a 'poverty trap' and 'backwards trap,' Zhou said.

It cannot be said that only the loans provided by Western countries in the past were development aid while those from China are now labelled "debt trap," Zhou argued.

China-Africa financing cooperation has provided Africa with new options to break the bottleneck of insufficient funds for development, he said, adding that China has provided Africa with new financing channels different from the traditional funding sources from the West to help build capacity for self-generated development.

"The fruitful and tangible outcomes of our cooperation are solid there for all to see," Zhou said.

He noted that financing from Western countries mainly focuses on non-manufacturing sectors and often comes with political strings attached, which is detrimental to the continent's long-term growth and stability.

"Instead of truly helping Africa to advance economic growth, generate more tax revenues, and increase exports and earn foreign exchange for improved balance of payments, such financing is used as a means to remold the continent," Zhou said.

He added that China is fully implementing the G20 Debt Service Suspension Initiative for Poorest Countries and has put off more debt payments than any other G20 members and has signed agreements or reached common understanding on debt relief with 19 African countries.

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