World Bank concerned about China’s loans to Africa

The president of the World Bank, David Malpass, affirmed that he views with “concern” the concessions of bank credits that China has granted to several African countries.

In an interview, Malpass assured that the terms and conditions of these credits must be “more transparent”, amid reports that countries like Ghana and Zambia are having problems repaying the borrowed money.

Many countries with fragile developing economies accept loans from other nations or from international organizations, but rising interest rates in the past year mean many of them are having trouble repaying them.

For Malpass, it is especially difficult to find that extra money in an economy whose currency is constantly devaluing, which causes a “double whammy, and means that (economic) growth is going to be slower.”

“What I especially recommend is that they be transparent in the contracts. That has been one of the problems, if you draw up a contract and it says but don’t show it to anyone else, that’s a negative point, you have to get away from that,” he added.

In the case of Chinese loans, he said African governments are “offering collateral as incentives to get credit,” something they shouldn’t do because it “locks (the issue) in for generations.”

These financing problems, Malpass points out, are not exclusive to the Asian giant: “If you look at the history of Western loans, sometimes it is not for the benefit of people in other countries. Even IMF credits have not always been the best thing that could be done for a country”.

K. Tovar

Source: El Periodico

(Reference image source: file)

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