Friday, October 23, 2020

China writes-off Botswana’s almost two-decade loan

Chinese President Xi Jinping has offered his unwavering support to Africa in the fight against the Coronavirus pandemic amid mocking flu claims peddled by Washington – in particular by President Donald Trump.

In mid-June 2020 broadcast to African leaders, at the time of the re-occurrence of the Covid-19 in Beijing, the unruffled Chinese President expressed solidarity with African leaders, including Botswana’s President Mokgweetsi Masisi in their fight against Covid-19.

While Xi’s speech offered a reassuring dose of rhetoric for his African audience, it was also peppered with policy announcements. The Chinese leaders promised that his country – regarded as the second most powerful in the world, would extend debt support to distressed African partners by cancelling interest-free loans that are due to mature by the end of 2020.

This past week, in the capital of Botswana – Gaborone an announcement, which seems to be closely linked to the June promise was made. China has exempted the government of Botswana from payment of an interest free loan allocated in 2003.

The loan, the records shows, was for the construction of a Multi-purpose youth centre in Gaborone. The records also show that the balance of the loan for the youth facility was an approximately P27million from the P70million extended 17 years ago.

The Multi-purpose youth centre project was kick started in October 2009, officially handed over in December 2012 and subsequently became operational in late 2013. The place is currently run by the Botswana National Youth Council (BNYC) who also double as its custodian.

Sitting on 8 hectares of land, the center consists of swimming pool, soccer field, basketball court, skating court, outdoor opera and a diving pool. It is also used to provide training, counseling, recreational and leisure facilities for the young people of Botswana.

This week, Botswana’s Finance Minister – Dr Thapelo Matsheka appreciated the gesture extended by the Chinese Government to exempt payment of this outstanding loan amounting to 15,570,380Renminbi Yuan, approximately,P27 million.  

This exemption he said: “is extended in support of Botswana Government’s fight against the COVID-19 pandemic, economic development and also to reduce the debt burden. It would also allow the Government to undertake priority development projects as outlined in our revised National Development Plan 11 and also in the Economic Recovery and Transformation Plan.”  

Meanwhile Johns Hopkins University’s China Africa Research Initiative calculates that the Chinese government, banks and state-owned enterprises lent some $152bn to the African continent between 2000 and 2018, some of which has been repaid. The World Bank estimates that China accounts for 17 percent of African debt.

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