Singapore - African countries are increasingly looking to borrow money from
China because the flow of funds from the World Bank and other donors has been
slow and contain too many conditions, several African finance ministers said
Sunday.
China's economic surge over the past decade has boosted demand for oil and
commodity exports from Africa, helping spur growth in some of its major
economies like Nigeria and Kenya.
Meanwhile, Beijing is steadily strengthening its economic and political ties
with Africa by investing in the continent and offering loans. In June, Chinese
Premier Wen Jiabao visited several African nations, signing a string of
investment and loan agreements in Egypt, Angola and Ghana.
Many highly indebted countries in Africa have had their loans written off by
Western governments and donor agencies. But several African nations complain
that the flow of fresh funds has been slow.
New money is needed to invest in infrastructure building and development
projects, John Benjamin, finance minister of Sierra Leone, whose country has
seen its infrastructure destroyed by war.
While the World Bank and the donor countries have pledged more funds, little
has come through, said Benjamin during a seminar at the annual meetings of the
World Bank and International Monetary Fund that run through Wednesday.
Additional aid and loans have come "far too slowly and the conditions are far
too many," said Abdoulaye Diop, Senegal's economy minister.
The World Bank usually ties its loans to various conditions, such as fiscal
reforms and steps to privatize the economy, which recipient countries say cause
delays.
A recent study commissioned by Britain-based aid group Oxfam International
found that 15 out of 20 developing countries assessed in 2006 had
privatization-related conditions attached to their World Bank lending contracts.
Loans from China, however, come with are few conditions, African officials
say.
Furthermore, Kenya's Finance Minister Amos Kimunya said the interest rates on
Chinese money is "fairly comparable" with the rate charged by the World Bank's
infrastructure lending arm, the IBRD.
"I see this as an opportunity for countries in Africa, who have traditionally
looked to the West, to increase their trade and interaction with China," Kimonya
said. "China is country of 1.3 billion people and has the world's fastest
growing economy. How can we ignore that?"
During his trip to Africa this summer, China's Wen signed 10 oil, natural gas
and telecommunications deals in Egypt and also agreed to give Egypt a US$50
million loan and a US$10 million grant.
In Ghana, Wen agreed to give Ghana a low-interest loan of about US$66 million
for a number of projects, including a plan to upgrade its communications
network.
