Jakarta, CNBC Indonesia – Chinese Foreign Minister Wang Yi on Thursday (6/1/2022) emphasized that the loans that China provides in Africa and other developing countries under the ‘Belt and Road/(BRI)’ scheme are not a trap. This he conveyed on the sidelines of his visit to Kenya.
quote AFP, Wang said China’s loans to Africa were ‘win-win’ for both sides. Not a strategy to extract diplomatic and commercial concessions.
“That is not a fact. This is speculation played by some people with ulterior motives,” he told reporters in the Kenyan port city of Mombasa, Thursday (6/1/2022).
“This is a narrative created by those who don’t want to see development in Africa. If there are pitfalls, it’s about poverty and underdevelopment.”
China is Africa’s largest trading partner, with direct trade worth more than US$ 200 billion in 2019. In Kenya, Beijing is Kenya’s second largest lender with a loan value of US$ 5 billion or around Rp 70 trillion.
Even so, analysts continue to warn that Kenya may not be able to repay its loans. Aly-Khan Satchu, a geopolitical and economic analyst, said the East African country was at a disadvantage in negotiating deals and often stuck with high-interest payments.
“This investment will not yield any future returns on investment,” he said.
“You’ve taken these loans and they’re making a loss every month. You’re basically increasing the problem.”
Satchu said China had shifted focus from infrastructure to greater trade. In addition, Beijing is also looking at the prospect of deepening ties with the Indian Ocean economy.
“China is trying to recalibrate their relationship with Africa, with a lot of emphasis on agriculture and lending to the private sector,” he added.
Launched in 2013, the BRI aims to enhance Beijing’s trade ties with countries around the world. This is done by channeling loan funds to build ports, railways, airports, and industrial estates in countries with limited access to infrastructure.
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