US warns Africa not to expect debt relief

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The United States Assistant Secretary of State for African Affairs, Tibor Nagy has warned African countries running up debt they won’t be able to pay back, including to China, not to expect to any western-sponsored debt relief.

Nagy made this disclosure while addressing reporters in Pretoria, South Africa, on Sunday.

In 1996, the International Monetary Fund and World Bank began the Heavily Indebted Poor Countries (HIPC) Initiative to help the world’s poorest countries clear billions of dollars-worth of unsustainable debt.

According to a 2018 report by IMF, Africa is facing another potential debt crisis today, with around 40 percent of low-income countries in the region now in debt distress or at high risk of it.

“We went through, just in the last 20 years, this big debt forgiveness for a lot of African countries.

“Now all of a sudden are we going to go through another cycle of that? … I certainly would not be sympathetic, and I don’t think my administration would be sympathetic to that kind of situation,” Nagy said.

China has frequently come under attacks by US president Donald Trump’s administration, for pushing poor countries into debt, mainly through lending for large-scale infrastructure projects.

The US has warned those nations risk losing control of strategic assets if they can’t repay the Chinese loans.

Sri Lanka formally handed over commercial activities in its main southern port in the town of Hambantota to a Chinese company in 2017 as part of a plan to convert $6 billion of loans that Sri Lanka owes China into equity.

U.S. officials have warned that a strategic port in Djibouti could be next, but the government there has denied it.

 




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