WB President ‘Worried’ over China’s Loans to African Countries

Sun Apr 02 2023
icon-facebook icon-twitter icon-whatsapp

NIAMEY, NIGER: World Bank President David Malpass has expressed concerns about the “unchecked and whooping” Chinese loans to African countries

Malpass, who has been visiting Niger’s capital Niamey this week to promote education as a tool for economic development, told the BBC that the terms and conditions of Chines loans needed to be “more transparent”.

The world bank chief expressed his concerns amid worries that African countries including Ghana and Zambia struggled to repay their debts to Beijing. China says that every lending was done within international rules.

Developing countries, mainly in Africa and South Asia often borrow money from other nations or international lenders to finance sectors such as infrastructure, education and agriculture, hoping to reap dividends.

However, over the last year, high-interest rates in the US and other leading economies were making loan repayments for these countries more expensive because lots of that borrowing was done in foreign currencies such as US dollars or euros.

Malpass said that it was a double whammy and meant that [economic] growth would be slower.

He said the competition between the US and China was “maybe healthy for developing countries” as it provided different options, but he strongly encouraged them to be transparent in their contracts. He said that that had been one of the problems as if you write a contract and ‘say but don’t show it to anybody else’, that was not good and get away from that.

Malpass said the problems were common to Chinese financing, but things were improving.

He said that if you think of the history of Western lending, sometimes it was not for the full benefit of the people in the countries [being lent to]. Even World Bank loans have not always been for the best that could have been done in a country.”

He said what they were trying to do, and everyone should be trying to do, was improve the quality of the lending.

icon-facebook icon-twitter icon-whatsapp