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China-Africa relations
ChinaDiplomacy

Coronavirus: China suspends US$2.1 billion in debt service for poor nations

  • Beijing says official bilateral lender and a commercial creditor offer relief to help debtors weather the pandemic
  • Beneficiaries not specified but Zambia and Angola have recently received debt service payment relief in line with a G20 initiative

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The Export-Import Bank of China has suspended some debt payments from poor countries under the G20’s DSSI scheme. Photo: Imaginechina
Jevans Nyabiage

China has suspended US$2.1 billion of debt service payments from 23 poor countries as the coronavirus pandemic worsens a debt crisis in Africa.

On the eve of this weekend’s G20 summit, Chinese Finance Minister Liu Kun said on Friday that the China International Development Cooperation Agency and official bilateral lender Export-Import Bank of China had suspended debt service payments worth US$1.353 billion as part of the Group of 20’s Debt Service Suspension Initiative (DSSI).

Liu said China Development Bank (CDB) – which Beijing classes as a commercial creditor – had “on a voluntary basis and according to market principles, actively responded to the DSSI”.

By the end of September, CDB had signed agreements with DSSI beneficiaries involving US$748 million.

The DSSI offers a temporary suspension of government-to-government debt repayments to 73 developing countries to help them weather the impact of the coronavirus pandemic.

In April, the G20 finance ministers and central bank chiefs agreed to suspend debt service payments owed by the poorest countries and falling due from May 1, 2020, to the end of the year, to free up resources to fight the coronavirus.

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