January 11, 2023

China to partially waiver Ethiopia’s debts

City: Addis AbabaNewsBusiness

Reports show Ethiopia gained 4.8 Billion USD from China between 2000 to 2020, being the top beneficiary of Chinese debt next to Angola and Kenya.

Avatar: Ilyas Kifle
By Ilyas Kifle

Ilyas is a reporter at Addis Zeybe experienced in creative writing and content production.

China to partially waiver Ethiopia’s debts
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Credit: The Ministry of Foreign Affairs of Ethiopia (Qin Gang, Foreign Minister of China, and Demeke Mekonnen, Ethiopian Minister of Foreign Affairs during the signing of MoU)

Ethiopia's Minister of Foreign Affairs, Demeke Mekonnen, and his Chinese counterpart, Qin Gang, signed a Memorandum of Understanding for a partial waiver of an unspecified amount of Ethiopia's debt and strengthening the countries' political and economic cooperation. 

Qin Gang, the new Foreign Minister of China, has made Ethiopia his first African destination on his working visit since taking office. He met and held deliberations with Prime Minister Abiy Ahmed and Demeke Mekonnen, Deputy PM and Minister of Foreign Affairs. 

China has offered a blend of interest-free, commercial, and concessional loans to Ethiopia. Data from Johns Hopkins University indicates Ethiopia has received over 12.1 billion USD from China’s state policy banks since 2000.

Experts in the field remark that such debt strategies are “China’s debt trap” while others on the contrary consider it as “genuine support”. 

US Institute of peace wrote in an article on Jan 2022, “Ethiopia is a central hub for China’s Belt and Road Initiative, an evolving program to expand Chinese influence by financing and building infrastructure throughout the developing world”.

During his discussion with the Ethiopian higher officials, Qin Gang reiterated China's readiness to deepen and expand bilateral cooperation in various fields with Ethiopia and encourage more Chinese enterprises to invest in Ethiopia and participate in its reconstruction drive.

PM Abiy Ahmed said Ethiopia looks forward to expanding its exchange of experience in governance with China in order to unify and inspire all Ethiopians to uphold their nation's independence and hasten the country's growth and revival.

He noted that Qin's decision to make Ethiopia his first abroad destination since assuming office is a clear indication of the two nations' close relationship and the significance of their bilateral relations.

According to the Global Development Policy Center, Ethiopia attained 4.8 Billion USD from China between 2000 to 2020, making it the top beneficiary of Chinese debt next to Angola and Kenya.

Beijing was labeled by the US as “sitting on the sidelines of the peace effort” in the endeavor of brokering negotiations during the two-year-long conflict. 

Qin said China has always taken the view that the conflict in Tigray is an internal affair of Ethiopia and that the Ethiopian people have the wisdom and ability to independently resolve their internal differences, CGTN reported.

The Ethiopian Ministry of Foreign Affairs said in a statement that Qin Gang reaffirmed the Chinese government's commitment to strengthening and maintaining its all-weather friendship with Ethiopia in the face of changing international circumstances. 

It was previously reported that China has canceled all interest-free loans it has advanced to Ethiopia till the end of 2018. 

The new Foreign Minister of China, Qin Gang, will also visit other African countries until Jan 16, 2023.