World Bank reiterates intentions to collaborate with China in Africa
18 January 2008
During a recent visit to China, Bank President Robert Zoellick appeared keen to assuage concerns that China’s massive loan packages to Africa could compromise recent efforts to reduce some African countries’ debt burdens. Zoellick also praised China for its decision to contribute for the first time to the World Bank’s International Development Association (IDA).
The Financial Times (FT) reports that during his recent visit to China, World Bank President Robert Zoellick restated the Bank’s interest in teaming up with the Export-Import Bank of China (China Exim), the country’s official export credit agency, on financing development projects in Africa.
Zoellick appeared keen to assuage concerns that China’s massive loan packages to Africa could compromise recent efforts to reduce some African countries’ debt burdens. While the FT reports that Zoellick acknowledged that there was “legitimate concern about building that debt up,” he said China was willing to discuss the issue “because they want to get paid back, too.”
The Bank President also praised China for its decision to contribute for the first time to the World Bank’s concessional lending window for impoverished countries, the International Development Association (IDA).
In May 2007, Reuters reported that the World Bank and the China Exim signed a memorandum of understanding to collaborate on projects in Africa. The Bank indicated that these joint investments would focus primarily on infrastructure lending, namely in the transportation and energy sectors, and that their efforts would initially be concentrated on “sustained-growth” performers such as Ghana, Uganda and Mozambique.
Little is known about the terms of the agreement between the two lenders, as its text was not disclosed. Some observers have speculated that the Bank’s decision to team up with China Exim is part of its strategy to avoid competition with its rapidly growing Chinese counterpart. It is less clear what China Exim’s incentives are for joining hands with the Washington-based Bank.
Resources