Xi Jinping pledges US$60bn of development funds to Africa at forum
President Xi Jinping on Friday offered US$60 billion of funding to African nations for their development and pledged to restructure their debt, a move to expand Beijing’s influence in the continent despite a decline of investment from China as its economy slows.
The funding package for the next three years would include US$5 billion in zero-interest loans and US$35 billion in preferential financing, export credit lines and concessional loans as part of a 10-point development plan, Xi told a dozen African heads of state at the Forum on China-Africa Cooperation in Johannesburg yesterday.
“The plan aims to address three issues holding back Africa’s development, namely inadequate infrastructure, lack of professional and skilled personnel and a funding shortage,” the president said.
His plan calls for China to help Africans build and operate railways, roads, airports, ports, power stations and telecommunications on the continent, which is a key supplier of commodities.
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South African President Jacob Zuma, who is co-chairing the summit with Xi, said African countries needed China’s help to process their abundant natural resources, which he said had made the continent vulnerable to exploitation in the past.
“That way what is buried in the belly of the soil will translate into benefit for the bellies of our citizens,” Zuma said.
Li Zhibiao, a senior research fellow at the Chinese Academy of Social Sciences, said that both sides had their own problems. “China’s aid is not entirely altruistic. Helping Africa to develop its resource sector will also consume some of the overcapacity of China’s industries,” he said. By transferring China’s excess industrial capacity to Africa, not only does China benefit from the greater growth potential, but also helps improve China’s image. Critics have blamed China for eyeing Africa’s resources.
Falling global commodity prices have caused Sino-African trade to fall 18 per cent year on year in the first three quarters, while Chinese investment in Africa fell 40 per cent this year.
Xi also told the summit that China would waive outstanding debts on zero interest loans to Africa’s least-developed countries that fall due this year, following a similar pledge made at the UN in September to help small landlocked and island nations.
African countries have been expected to seek loan moratoriums after falling metal and oil prices hurt their currencies.
Xi also said China would increase cooperation with Africa in the fight against violent extremism and insurgencies, and pledged not to interfere with the political choices of individual countries on the continent.
Additional reporting by Reuters
