China puts up $20b credit for Africa as Ghana benefits from $2b facility

Chinese President Hu Jintao has announced a $20 billion line of credit for Africa over the next three years.

The loan is expected to boost Africa’s economy and also to strengthen what Hu calls “a new type of China-Africa strategic partnership”.

In the next three years, the Chinese government said it will take measures in five priority areas to support the cause of peace and development in Africa.

“China will provide 20 billion dollars of credit line to African countries to assist them in developing infrastructure, agriculture, manufacturing and small and medium-sized enterprises,” President Hu Jintao said during the Fifth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in Beijing July 19, 2012.

He said China has met the pledge of providing $15 billion of lending of a preferential nature to Africa.

China’s trade with and investment in Africa have been expanding and giving figures, Hu said “in 2011, our two-way trade reached $166.3 billion, three times the figure in 2006.”

He stated that cumulative Chinese direct investment in Africa has exceeded $15 billion, with investment projects covering 50 countries.

In a related development, The China-Africa Development Fund (CADFund) has committed to investing $2 billion in Sino-African cooperation projects, Chinese news agency Xinhua has reported citing an official of the China Development Bank (CDB), the fund’s shareholder.

The fund will lead to $10 billion in investment on the part of Chinese enterprises according to preliminary estimates, CDB Vice President Yuan Li said at the 4th Conference of Chinese and African entrepreneurs, Xi nhua reports July 18, 2012.

The promised fund involves 60 projects in 30 African countries, which include an economic and trade zone in Egypt, a cement factory in Ethiopia and a power plant in Ghana, Yuan said.

The CDB has also made a separate investment commitment of over $1 billion towards small and medium-sized enterprises (SMEs) in Africa, the state-run news agency cited Yuan as saying.

The two investment commitments are said to be among the eight major Sino-African cooperative measures announced by Chinese President Hu Jintao at the Beijing Summit of the Forum on China-Africa Cooperation in 2006.

By Ekow Quandzie