Is China to blame for Africa's financial burden?

World
Europe

02:05

Two days before the 2018 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) scheduled for September 3 and 4, Chinese President Xi Jinping held talks with Ghana's President Nana Akufo-Addo. The two leaders agreed to inject new vitality into their bilateral relationship.

China and Ghana have long been enjoying great political and economic relations. In 2017, bilateral trade amounted to 6.7 billion US dollars, an increase of 11.7 percent compared to the previous year.

Ignoring this progress, some Western media have been obsessed with accusing China of setting a "debt trap" and causing financial burdens for African countries.

Liu Xin, hostess of The Point with CGTN, sought the opinion of Alan Kyerematen, Minister of Trade and Industry of Ghana and Former Ambassador of Ghana to the United States of America during the exclusive interview, of the issue.

"Already most African countries, including Ghana, are overburdened with debts," Kyerematen said. "Once you are burdened with debts, it has certain multiple effects on your economy, and it becomes a vicious cycle.

According to Kyerematen, the only way to break this cycle is to attract foreign direct investment in joint ventures with local companies. He explained that if Chinese companies can partner with local private sector either through their own resources or by borrowing from Chinese banks, then the issue of debts does not arise. "It is an investment."

"So we don't want our relationship only to be focused on EPC, we want it to be a partnership also based on investments so that we can avoid this challenge and enlarge our debt portfolio," Kyerematen concluded.