Thursday, November 4, 2010

China pours more cash into Africa

China would encourage commercial banks to lend more to Africa, a trade official said on Saturday.

Beijing pledged $10 billion (R69bn) in "preferential" loans to Africa last year, but Ministry of Commerce official Zhong Manying said that was not enough.

"In view of Africa's demand for funds, the $10bn is too limited," Zhong told a news briefing.

A recent World Bank study showed that Africa needed $93bn in annual infrastructure spending, with at least $45bn relying on external financing.

Zhong shrugged off talk that loans might worsen Africa's debt problems. "What is the most important thing for Africa? Survival and development," she asked.

Chinese banks have already started to pour money into Africa.

Last month, Ghana signed nearly $13bn worth of loan deals with two Chinese banks.

A Chinese loan deal to the Democratic Republic of Congo was cut to $6bn from $9bn last year after the International Monetary Fund raised concerns that the deal, which used mineral reserves as a guarantee, would plunge the country deeper into debt.

Chinese investments in Africa hit $32.3 billion by August, spurred by a co-operation model of "resources for projects and credit", the ministry said.