China quietly writes off chunk of Cameroon debt. Why the secrecy?
When top Chinese diplomat Yang Jiechi met Cameroon President Paul Biya in the capital Yaounde last month and wrote off a chunk of the African country’s debt, the deal very nearly went unnoticed.
China issued no press release, and the Cameroon government did not mention the debt cancellation in its write-up of Yang’s visit.
It was only when a Chinese news report later alleged that Beijing had written off 3 trillion Central African CFA francs ($5.2 billion) of Cameroon’s debt during Yang’s trip that the existence of a deal emerged.
The figure was incorrect. Five billion dollars is close to the amount Cameroon has borrowed from Beijing since 2000, according to the China Africa Research Initiative (CARI), and exceeds the amount the country is believed to still owe.
But while the news report was wrong, its release did force the Chinese government to speak publicly about what type of deal had been reached.
Last week, Chinese Foreign Ministry spokesperson Hua Chunying told CNN: “China agreed to waive the interest-free inter-governmental debt that Cameroon had not paid back by the end of 2018.”
That debt was worth $78.4 million. Cameroon’s total debt is 5.8 trillion Central African CFA francs ($10 billion), about a third of which is owed to China, according to the International Monetary Fund.
In short, this was a tiny slice of Cameroon’s liability to China. So why the initial secrecy?
AFRICAN DEBT BACKLASH
Debt write-offs for developing nations are usually greeted with great fanfare, such as the IMF and World Bank’s Heavily Indebted Poor Countries (HIPC) Initiative, or the Paris Club’s landmark debt wipe-out in the early 2000s.
In China, it’s more complicated: African debt has become increasingly controversial at home.
When President Xi Jinping pledged a $60 billion package of aid, investment and loans to Africa last September at the triennial Forum on China-Africa Cooperation, angry posts emerged on the Chinese internet.
Critics questioned why China — where at least 30 million people still live in poverty, defined as an annual income of less than 2,300 yuan (about $340) — was giving money to Africa. Censors quickly deleted the complaints.
There is also this to consider: African nations have borrowed $143 billion from China since 2000, according to CARI figures.
Beijing’s leniency toward Cameroon could prompt other heavily leveraged nations, such as Ethiopia, Djibouti and Zambia, to expect similar treatment.
China may have also sought an under-the-radar arrangement because of Cameroon’s political turmoil.
Last week, police arrested Maurice Kamto, the Cameroonian opposition leader who claims to have won last year’s election, along with several staff supporters, amid protests that are fueling political instability.
The West African nation is battling a Boko Haram insurgency in the north, while a secessionist movement is destabilising the two Anglophone regions of the largely French-speaking nation which was born from the unification of a former British and a former French colony.
Due to the unrest, Cameroon has been stripped of the right to host the 2019 African Cup of Nations, the continent’s quadrennial soccer championship, which will now take place in Egypt.
From a human rights perspective, the bar for Chinese political partners in Africa is low.
Beijing backed Zimbabwe during some of the darkest years of dictator Robert Mugabe’s rule, and poured money into Angola under former president José Eduardo dos Santos, an authoritarian figure associated with large-scale corruption.
But 85-year-old Biya, who has ruled Cameroon for 36 years, is increasingly looking like an “inappropriate partner” from a business standpoint as China faces growing scrutiny on the continent, says Chris Roberts, a political scientist at the University of Calgary.
“Cameroon in every way, shape or form is getting worse by the day in every metric,” says Roberts. “This regime has dismantled whatever foundations it had for a stable economy.”
DEEP POCKETS, DEEP PORT
China established diplomatic relations with Cameroon in 1971.
Their economic partnership grew after Nicolas Sarkozy became president of France in 2007 and oversaw his country’s decreased engagement with its former colonial territory, leaving a vacuum for Beijing to fill.
Since the turn of the century, China has been granting Cameroon debt relief: In 2001, it canceled $34 million of debt, then in 2007 it forgave another $32 million and $30 million was wiped out in 2010.
Those figures in fact paled in comparison with the $227 million Canada forgave in 2006, for example, notes Roberts.
But it was in 2011 that China really committed to Cameroon by agreeing to build and finance a new port in the fishing town of Kribi.
It seemed a stable place to invest: Cameroon was considered a relatively peaceful nation in a war-torn region.
For Citizen TV updates
Join @citizentvke Telegram channel
Video Of The Day: Treasury allocates Ksh 4.5 B for procurement of vaccines