China pledges more cash for Africa debt relief

China has stopped short of providing the debt relief sought by many African countries this week but pledged 360 billion yuan ($50.7 billion) over three years in credit lines and investments.

The Forum for China-Africa Cooperation (FOCAC) launched in 2000 took on an enhanced role after the 2013 inception of President Xi Jinping's Belt and Road Initiative (BRI), which aims to recreate the ancient Silk Road for the world's second-largest economy and biggest bilateral lender to Africa.

"China is moving back onto the front foot in terms of overseas deployment of capital in the emerging markets," said Tellimer's Hasnain Malik, while adding it was not yet at pre-Covid levels.

China has also sought to use FOCAC to counter growing competition in Africa from the United States, the European Union, Japan and others.

In Beijing, diplomats and delegates from around the world mingled in the Great Hall of the People in Tiananmen Square as leaders from more than 50 African countries and Chinese officials led by Xi gathered for a group photo.

The new financial pledge is more than what Beijing promised at the last FOCAC in 2021, but below the $60 billion of 2015 and 2018, which marked the peak of lending to Africa under the Belt and Road Initiative.

During those peak years, Beijing bankrolled the construction of roads, railways and bridges. But a drying up of funds since 2019 has left Africa with stalled construction projects.

'Small and beautiful'

The new funds will go towards 30 infrastructure projects to improve trade links, China said, without giving details.

The 54-nation continent of more than 1 billion people has an annual infrastructure funding deficit estimated at $100 billion, and needs transport links to make a new giant pan-African trade bloc (AfCFTA) a reality.

Beijing has in recent years cut funding for such projects as it shifted focus to "small and beautiful" projects, mainly due to its own domestic economic pressures and an increase in debt risks among African countries.

Asked how the new commitments fit into China's current cautious overseas lending strategy, a foreign ministry spokesperson said there was no contradiction.

"The cooperation between China and African countries, including the specific implementation of projects, is discussed and determined by both sides," Mao Ning, a foreign ministry spokesperson told a regular news conference on Friday.

China also said it will launch 30 clean energy projects in Africa, offer cooperation on nuclear technology and tackle a power deficit that has delayed industrialisation efforts.

"The outcomes of the FOCAC summit signal an impetus for green projects and especially for renewable energy installations," said Goolam Ballim, head of research at South Africa's Standard Bank.