Chinese President Xi Jinping on Monday agreed in principle to a restructuring of Congo’s vast debts, an issue which was blocking negotiations with the International Monetary Fund, a minister said.
Congolese Finance Minister Rigobert Roger Andely said President Denis Sassou Nguesso had “raised the problem” in a telephone call with Xi, “proposing a second restructuring” of the debt.
“President Xi Jinping approved” the request, Andely told reporters.
“This restructuring is to allow the country to have a few more resources to deal with its own internal needs and to lift this obstacle to good relations with the IMF.”
Andely said experts from both the Chinese and Congolese sides would be charged with fixing the conditions of the new agreement.
China had already restructured Brazzaville’s debts in 2019 to allow the Central African oil producer to unlock an IMF loan of $449 million.
Since then, Congo’s debts have risen to some 110 percent of GDP – a level deemed “unsustainable” by the IMF, Prime Minister Anatole Collinet Makosso told parliament Monday.
The global lender considers 70 percent of GDP to be the norm in central Africa, the premier said.
The IMF suspended its payments to Brazzaville, hitting the economy hard at a time when it was already suffering due to the COVIDd-19 crisis and falling oil prices.
Congo owes China 1.3 trillion CFA francs ($2.4 billion), but its overall debts had climbed to 10 billion euros by the end of 2020, according to Makosso – some 98 percent of GDP.
China, the world’s largest creditor, is Africa’s largest trading partner.
Beijing has often faced accusations of “debt-trap diplomacy” due to the scale of its lending to developing countries in Africa and elsewhere, as well as the secretive nature of the loan contracts.