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BEIJING: China has extended debt relief to developing countries totaling $ 2.1 billion under the G20, the highest among group members in terms of deferred amount, the the country’s finance minister Liu Kun (November 20).
Liu’s comments come as African countries, hammered by the COVID-19 pandemic, face another debt crisis and will need more long-term help than the latest G20 debt suspension initiative (DSSI) offers them to ward off trouble and keep much needed investment coming up.
The China International Development Cooperation Agency, the country’s aid agency and the Export-Import Bank of China, the official bilateral creditors, have suspended debt service payments from 23 countries, totaling $ 1.353 billion, Liu said in a statement on the ministry’s website.
China Development Bank, as a commercial lender, has signed agreements with developing countries in the amount of $ 748 million by the end of September, Liu said.
However, this is minimal compared to the debt that developing countries owe to China. A World Bank study showed that the poorest countries’ official bilateral debt to the G20 countries reached $ 178 billion in 2019, with 63% of the total owed to China.
One third of the $ 30.5 billion in public debt service payments owed in 2021 by ISD-eligible Sub-Saharan African nations is owed to official Chinese creditors, while a further 10% is linked to the China Development Bank, according to ‘Institute of International Finance.
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READ: The G20 agrees on a framework for greater debt relief under COVID-19
The United States, China and other G20 countries have offered relief to the poorest countries in the world, many of which are in Africa, until at least mid-2021 and will decide whether another six-month extension is needed in April next year. year.
Liu said China is willing to step up financial aid for developing countries and more support will be given to those most affected by the pandemic and under severe stress, and will also prioritize the provision of COVID-19 vaccines. to poor economies.
China will also consider making donations to a multilateral debt relief facility if the World Bank decides to create one, Liu said.
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