China mocks Zambia with $22m debt cancellation from $4 b debt

China mocks Zambia with $22m debt cancellation from $4 b debt

The Chinese government says it has written-off US$22 million as part of debt that Zambia owes the Asian country to reduce the debt burden.

Zambia’s external debt rose to $10.05 billion at the end of 2018 from $8.74 billion at the end of 2017, Finance Minister Margaret Mwanakatwe in February. A third of that debt is owed to China.

Now China says it has cancelled a paltry $22 million which is actually a portion from the interest on interest. The actual debt remains intact, due and bearing more interest, though they they claim that its interest free. Besides, China knows that it has already reaped huge amounts of money from bagging most Zambian government contracts. The $ 22 million cancellation therefore means nothing to Zambia but China will use it to continue holding Zambia to ransom and Zambian leaders dancing to Chinese tunes.

According to Zambian government media,
Chinese Foreign Affairs Minister Wang Yi said that the US$22 million (150 million RMB) loan was provided in the Agreement on Economic and technical Cooperation between the two sides of China and Zambia signed on July 2, 2007.

Mr Wang said his government cancelled that debt because it was keen to see Zambia attain more economic development, and no amount of propaganda peddled by some sections of society would frustrate China from offering more support to African countries.

“Today, we are signing this debt cancellation because we are keen to see Zambia grow from strength to strength and we shall do what we can to support Zambia’s development agenda, ” he said.

He was speaking during the signing ceremony for economic agreements and debt cancellation between deputy director of China International Development Cooperation Agency Zhou Liujun, who signed for China while Foreign Affairs Minister Joseph Malanji on behalf of Zambia, and was witnessed by Zambias Ambassador to China Winnie Chibesakunda at Diaoyutai Hotel.

Mr Wang said China’s offer of a grant of US$30 million (200 million Yuan) was coming in view of further developing the friendly relations.

He said the Chinese were confident that through such a grant, among significant infrastructure such as Levy Mwanawasa Teaching Hospital in Lusaka project could be completed by end of this year.

He said President Xi Jinping and President Edgar Lungu collaborate well and share ideas of development which result in China remaining focused to ensure funded infrastructure projects in Zambia were completed to better the lives of citizens.

And Mr Malanji said Zambia was grateful to the generosity offered by China citing the writing-off the debt which was coming at the right time when Zambia was enjoying cordial bilateral ties.

He said Zambia’s population was growing and there was huge demand for infrastructure ranging from roads networks and bridges and as such, Government was not borrowing for consumption but to inject significant projects of development.

Mr Malanji said the support from China was accelerating efforts of economic diversification as being emphasized by President Lungu from mining to industralisation and agriculture as espoused in the Seventh National Development Plan.

Source: Times of Zambia

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