All eyes on China as Africa spurns G20 debt relief plan
- Lukewarm response as debtor countries opt to negotiate with Beijing and other lenders on individual terms
- Fears G20 deal would block access to private finance and harm future credit ratings
The G20 finance ministers invited private creditors, working through the Institute of International Finance, to participate in the initiative on comparable terms but the lenders have insisted they will negotiate with African countries on a case-by-case basis, a stand also favoured by Beijing. The G20 has no power to force them to take part in the deal.
The response from eligible countries has also been lukewarm, because of a clause that blocks countries requesting relief from “contracting new non-concessional debt during the suspension period, other than agreements under this initiative”. Kenya has rejected the proposal and several low-income countries have also been reluctant to take up the offer.
Kenyan treasury cabinet secretary Ukur Yatani has said his country will negotiate at a bilateral level with China, France, Germany, Sweden and Japan to secure a moratorium on debt service payments for around a year, citing fears the G20 offer may lead to a downgrade of Kenya’s credit rating that could limit its access to loans at favourable terms from international finance markets.