‘No sinister motive in Chinese loans’

THE Chinese embassy in Namibia has defended the Asian country’s financing arrangements for Namibia, saying they are in line with economic and social development.

Responding to questions from , the embassy’s spokesperson, Lu Hairong, said China fully takes into account Namibia’s debt burden and repayment ability.

“As a sovereign country, Namibia has a strict and complete loan management system. At present, debt from China accounts for only 2,6% of total government debt, and 7,9% of total external debt of Namibia,” Lu said.

The embassy’s response comes after the United States ambassador to Namibia, Lisa Johnson, urged a fortnight ago that Namibia and other African countries should carefully examine whether their relationships with China are aligned to sustainable development goals.

Speaking at a press briefing, Johnson warned African countries to reject financing that is not transparent and creates unsustainable debt, or undermines their sovereignty.

The Chinese spokesperson, however, said any attempt to make use of this issue (loans to Namibia) to distort the win-win cooperation agreement between China and Namibia has ulterior motives and is untenable.

She said: “All loan agreements recently signed between China and Namibia are not mortgaged or pledged by any public assets or public resources.”

She stressed that China’s cooperation with Africa is mutually beneficial, and China’s aid and cooperation with Africa “has played an irreplaceable role in helping Africa’s economic and social development, and improving the welfare of people in Africa.”

Lu added that China does not attach any political conditions to non-investment and financing cooperation, and strives to support Africa to crack the three development bottlenecks of infrastructure lag, talent and capital shortages.

She said the above is meant to accelerate the process of industrialisation and agricultural modernisation in African countries, while achieving independent and sustainable development.

“The preferential loan rate offered by the Chinese party is only 2%, which is much lower than the interest rate of 7,7% to 10% for loans from the African Development Bank, the International Monetary Fund or the World Bank. In the specific operation, we are in strict accordance with the laws and market rules of various countries, adhering to the rules of openness and transparency. We never allowed or tolerated any black-box operations and corrupt practices,” she stressed.

Johnson had said although China is a large trading partner of the US, they are telling Africa to think about the nature of their relationship with China, and whether it aligns with their goals.

“With that, it’s up to every country to choose. It is not either or, but they need to think about what they are trying to achieve in their country and their goals,” the ambassador continued.

In July 2018, figures from the finance ministry showed that Namibia owed the Chinese government N$1,99 billion.

The debt was divided into two categories – N$302 million in interest-free loans, and N$1,694 billion in concessional loans.

Finance minister Calle Schlettwein said at the time that Namibia’s debt to China is provided within a framework between the two governments which contains concessional terms and conditions, as opposed to market loans of other lending institutions.