Debt Cancellation, Restructuring for African Countries Under Discussion with China

Addis Ababa, August 25/2020(ENA) Debt cancellation, restructuring and suspension for African countries are under discussion with the Government of China, Ethiopia's Ambassador to China said.

Ambassador Teshome Toga told ENA that discussions have been held with the Government of China on ways of debt cancellation and restructuring.

“We have actually two frameworks,” the ambassador said, adding that “one is the Forum on China-Africa Cooperation (FOCAC) and the second a bilateral mechanism.”

Based on those two frameworks, the Ethiopian government had presented its proposal which is  under negotiation.

It is to be recalled that Prime Minister Abiy Ahmed had last March proposed a 150-billion USD emergency financing package for Africa to combat the spread of COVID-19.

Ethiopia proposed that all interest payments to government loans should be written off. Besides, part of the debt of low-income countries should be written off.

In his statement the premier said “coronavirus poses existential threat to the economies of African countries. Our economies, fragile and vulnerable even in the best times, will face serious shocks following this crisis.”

Following the agreement reached by G-20 countries Ethiopia has presented its proposal to China, Ambassador Teshome said. The G-20 countries decision basically advocates debt payment suspension, “ but in our view this is not sufficient enough.”  

He noted that African countries need new investment. “ We need a new injection of capital in order to stimulate and handle our economy in the post-COVID-19 era.”

Ethiopia's Ambassador to Germany, Mulu Solomon said on her part the proposal presented by Prime Minister Abiy Ahmed is a great initiative that can help African countries cope with the  coronavirus pandemic.

“Prime Minister Abiy has presented a proposal for donors and lenders that they should seriously consider given the COVID-19 pandemic. This is under process, and it is a great initiative. We all are working on this,” she stated.