China increasing Africa debt is false, foreign minister Wang Yi says

Eric Lafforgue | Art in All of Us | Corbis via Getty Images

A souvenir seller near a Chinese construction site in Addis Ababa, Ethiopia, on March 7, 2016.

Chinese Foreign Minister Wang Yi has hit back against claims that China is increasing the debt burden of African countries.

Wang dismissed the allegation as false at a press conference Sunday in Luanda, Angola, as reported by China’s state-run news agency Xinhua.

China’s financing is a response to African countries’ own requirements for development and is welcomed by them, Wang said, adding that China did not attach political expectations to this.

Wang is currently on a multi-country visit to Africa, which began in Rwanda on Saturday. Wang then traveled to Angola, and is due in Gabon and Sao Tome and Principe later this week. He made his comments on financing at a press conference alongside Angolan Foreign Minister Manuel Domingos Augusto.

Wang referenced China’s own past when its economy was controlled by foreign powers, adding that Chinese foreign investment was based on mutual benefit, according to the news agency. He also said that the current debt status of some African countries was due to debt building up over a long time period.

China will host the Forum on China-Africa Cooperation in Beijing later this year.

It is funding infrastructure projects in some African countries as part of its Belt and Road Initiative (BRI), which aims to establish a network of trade routes centered on China.

The viability of the BRI has been questioned by other countries. Last week, Australia’s International Development Minister Concetta Fierravanti-Wells said in an interview with The Australian newspaper that Chinese infrastructure projects in the Pacific region were “white elephants.”

Duncan Innes-Ker, regional director for Asia and Australasia at the Economist Intelligence Unit, told CNBC via e-mail that: “China’s increased lending for development projects in Africa has, of course, increased the debt load of African countries, and it is disingenuous of Foreign Minister Wang Yi to suggest otherwise.”

He cited the example of Sri Lanka, in which the government sold a port project to Chinese firms when it was no longer able to afford debt repayments as “a warning for governments that take on too much debt from China for badly considered investments.”