AFRICA’S debt challenge should be addressed in a manner that safeguards economic growth and long-term development, Chinese academic Professor Bu Xu has said.
Prof Xu was speaking during a question-and-answer session following his presentation on “Building a Community with a Shared Future for Mankind and China’s Foreign Policy” on Monday during the Seminar for Media Professionals for Zimbabwe in Beijing.
The seminar is organised by the Academy for International Business Officials.
Prof Xu, who is also president of the Institute of International Development and Security Studies at Jiangsu
University, said while African nations faced pressure to resolve debt burdens, solutions should not weaken confidence in their economies or undermine future development prospects.
Estimates suggest that Africa’s total debt is hovering around US$1,8 trillion with Zimbabwe’s international debt approximately at US$12 billion .
“On one hand, the debt issue has got to be dealt with, got to be tackled, but it needs to be tackled in a way that will be able to sustain development and promote economic development,” he said.
Prof Xu said Africa’s debt challenges should be viewed within the context of the broader global financial system involving multiple creditors, including China, the International Monetary Fund (IMF), the World Bank, European countries, the United States and Japan.
“I know this can be a very sensitive issue, but my view is that the debt issue is part of a whole system,” he said.
“The debt issue from China, the debt issue from international financial institutions like IMF or World Bank, and also the debt issue for African countries with European countries or with the United States or with Japan, all are something related.”
His remarks come as several African countries continue engaging international lenders and development partners over debt restructuring, arrears clearance and sustainable financing models aimed at supporting economic recovery.
Prof Xu warned that approaches, which negatively affect investor confidence could have long-term consequences for African economies.
“If the issue is going to be tackled in a way that might reduce the confidence of African economies, that might have negative impacts,” he said.
Prof Xu added that creditors and international financial institutions also needed assurance that loan agreements and debt settlements would be managed in a sustainable and predictable manner.
“For companies or for state loans, they need to be looked at in a way that those companies or international banks believe the loans will be properly dealt with, and they also look forward to sustaining cooperation,” he said.
The academic cautioned against relying solely on blanket debt cancellation, saying long-term economic development should remain the priority.
“If we say let’s forget it, that of course is one way, but that might not be the best way because we must take into account the longer picture of economic development of African countries,” he said.
Prof Xu also called for stronger international cooperation in addressing Africa’s debt challenges through global institutions and coordinated engagement.
“We need to raise the issue to the whole international bodies to make sure these issues will be properly solved,” he said.-herald
