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Zimbabwe-China to meet on debt relief

21 Jun 2020 at 11:08hrs | Views
ZIMBABWE and China will soon begin talks to implement a directive by President Xi Jinping for Beijing to cancel financial obligations owed to African countries.

It is anticipated that the debt relief will provide a much-needed respite to Zimbabwe's economy, which has been severely affected by Covid-19. President Xi last week proclaimed that "China will cancel the debt of relevant African countries in the form of interest-free government loans that are due to mature by the end of 2020".

He said African countries that are hardest- hit by the coronavirus and are under heavy financial stress, will receive support. Furthermore, President Xi said in addition to cancelling debts to African countries, China will also influence the global community and financial institutions to extend the period of debt suspension to African countries that are experiencing challenges related to Covid-19.

Zimbabwe's economy, which is undergoing structural reform, has been hard hit by the coronavirus, particularly as the country has not been a beneficiary of long term finance packages from Western international financial institutions.

Latest figures show that the country's total foreign debt stands at US$8 billion. Responding to questions from our Harare Bureau last week, China's chief envoy to Zimbabwe Ambassador Gou Shaochun said dialogue would be held between the two countries to ascertain how Harare can benefit from President Xi's proclamation.

"This is a highly specialised and technical issue, which requires specific discussions between competent authorities of the two countries," he said.

Asked how much Zimbabwe currently owes China, Ambassador Gou said the Chinese embassy could not readily provide figures. Chief director for communications and advocacy in the Ministry of Finance and Economic Development Mr Clive Mphambela said Treasury would study the implications of President Xi's pronouncements.

"This is something that our officials at the Department of International Co-operation will study and come up with a definitive position. So the process of consultation has started and our officials will also need to sit down with their Chinese counterparts."

Mr Mphambela said previously, Zimbabwe was able to save US$50 million from debt relief offered by China.

"There is also a background to this subject because in 2015, President Xi issued a similar directive worth US$50 million to Zimbabwe," he said.

Ambassador Gou reiterated that President Xi is sincere in his commitment to support debt relief for African countries.

"On wider China-Africa co-operation, he (President Xi) called for greater co-operation under the Belt and Road Initiative and faster follow-ups to the Focac Beijing Summit, giving greater priority to co-operation on public health, economic reopening and people's livelihoods. He outlined measures to reduce the debt burdens of African countries within the Focac framework and called on the international community to act more forcefully on debt relief and suspension for Africa. Concrete proposals were also put forward to increase Africa's capacity for sustainable development in the long run."

Ambassador Gou said China is committed to continue supporting Zimbabwe as there are many projects that show the success of co-operation between the two countries.

In his remarks at the virtual Extraordinary China-Africa Summit on Solidarity Against Covid-19, President Xi encouraged international financial institutions to "act more forcefully" in relieving debt for African countries.

On Wednesday, President Mnangagwa, who is Sadc chairperson for the Organ on Politics, Defence and Security Co-operation, participated in the virtual Extraordinary China-Africa Summit on Solidarity Against Covid-19, which was co-chaired by President Xi and Senegalese President Macky Sall, the incoming chairperson of the Forum on China-Africa Co-operation (Focac).

In his address at the summit, President Mnangagwa saluted China for helping African countries, including Zimbabwe, in confronting the coronavirus pandemic.

"We welcome the initiatives announced by President Xi to continue assisting developing countries in the fight against the pandemic. Going forward, through this platform, there is scope to explore other opportunities in research and development in public health issues, pharmaceutical and medical equipment production," he said.

Source - sundaynews
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