Pompeo says China’s Africa lending creates unsustainable debt burdens

Written by REuters

U.S. Secretary of State Mike Pompeo on Wednesday blasted China’s policy on lending to African countries, reiterating Washington’s charges that it creates unsustainable debt burdens.

China’s President Xi Jinping indicated in a speech at a China-Africa summit last week that Chinese financial institutions should consult with African countries to work out arrangements for loans with sovereign guarantees, Fitch Ratings said in a report earlier on Wednesday. Xi also told the summit that Beijing would exempt some African countries from repaying zero-interest rate loans due at the end of 2020 and that it was willing to give priority to African countries once COVID-19 vaccines were ready for use.

Pompeo, a persistent critic of China, accused Beijing of “more empty promises and tired platitudes.” In a statement, Pompeo said Xi had failed to promise real transparency and accountability for China’s role in “unleashing” the novel coronavirus, which began in China, and charged that Beijing was creating “an unsustainable debt burden” in Africa.

Noting that China was “by far the largest bilateral creditor to African governments,” Pompeo said most U.S. foreign assistance was made in the form of grants rather than loans, “to promote transparent, private sector-led economic growth that benefits all parties.” Fitch said China’s pledge to relieve the debt burden owed to it by some emerging-market governments could ease near-term liquidity pressures in nations struggling with the fallout from the coronavirus pandemic.

It said Kenya, the Maldives, Ethiopia, Cameroon, Pakistan, Angola, Laos, Mozambique, Congo and Zambia were among the countries with a significant share of their debt owed to China and eligible for relief. Beijing has committed to participation in the Group of 20 major nations’ (G20) debt service suspension initiative (DSSI), which temporarily suspends debt repayments for 77 developing nations falling due between May and December