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Finance China offers $60bn in financial support to Africa amid debt-trap criticism

The East Asian nation has also written off debt for poorer African nations.

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play China's President Xi Jinping gives a speech during the opening ceremony of the Forum on China-Africa Cooperation at the Great Hall of the People, in Beijing September 3, 2018. (REUTERS)

China has pledged a total of $60 billion in funding for projects in Africa, Chinese President Xi Jinping announced Monday.

Speaking at the opening ceremony of the 2018 Beijing Summit of the Forum on China-Africa Cooperation, Xi said financing will be provided in the form of government assistance as well as investment and financing by financial institutions and companies.

play Chinese President Xi Jinping (front C), South African President Cyril Ramaphosa (front 3-L), Egyptian President Abdel Fattah al-Sisi (front 2-L), TogoÕs President Faure GnassingbŽ (front L) and other African leaders walk together after a group photo session during the Forum on China-Africa Cooperation (FOCAC) 2018 Beijing Summit in Beijing, China September 3, 2018. (REUTERS)

 

He also stated that government debt from China’s interest free loans due by the end of 2018 will be written off for indebted poor African countries as well as for developing nations in the continent’s interior and small island nations.

China will carry out 50 projects on green development and environmental protection in Africa, focusing on fighting climate change, desertification and wildlife protection.

Massive debt

The new $60bn will include $15bn of aid, interest-free loans and concessional loans, a credit line of $20bn, a $10bn special fund for China-Africa development, and a $5bn special fund for imports from Africa, Xi said.

play Chinese President Xi Jinping (Lintao Zhang)

 

Chinese companies will be encouraged to invest no less than $10bn in the continent in the next three years.

Economists and other international financial institutions worry that Chinese loans are burying some countries under massive debt.

The East Asian nation has, however, denied engaging in "debt trap" diplomacy adding that it continues lending to Africa on the grounds that the continent still needs debt-funded infrastructure development.

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