Ethiopia became the first country on the continent to have its Chinese debts restructured even as it became apparent that several other countries were waiting for loan concessions to avert distress.
On Thursday, Ethiopia announced that China had agreed to restructure some of its loans, including the one for the $4 billion railway linking its capital Addis Ababa with Djibouti.
Prime Minister Abiy Ahmed said the loans would be restructured, with a further 20-year extension, which will see its annual repayments come down to an affordable level.
It is understood that Djibouti could also be on the way to enjoying reprieve, given that its debts from Beijing were already choking it.
The country has seen its debt to GDP ratio raise 88 per cent, the latest report from Centre for Global Development shows, even as it ramps up its port infrastructure investment already running into billions of dollars.
During the summit, some African countries got a reprieve when Beijing decided to write off interest on some of their loans even as China said it was not to blame for the debt distress some of these countries found themselves in.
President Xi said that they would be writing off interest-free loans due by the end of this year for heavily indebted African countries, as well as Africa’s interior and small island nations.
This statement served as a reality check for Beijing’s ties with the continent, their growing appetite for its loans and the realisation of debt sustainability fears.
Chinas special envoy for Africa, Xu Jinghu said that Beijing understand the sentiments out there that they are burdening African countries with debt, but if you keenly look at the debt profiles, China is not their main creditor.
China will implement eight major initiatives with Africa in the next three years even as some previous pledges remain unfulfilled.