Tuesday, March 26, 2019

Ethiopia, China and Debt

The South China Morning Post published on 24 March 2019 an article titled "Ethiopia in Talks with China to Ease 'Serious Debt Pressure' Tied to New Silk Road Rail Link, Envoy Says" by Laura Zhou.

Ethiopia has a combination of interest-free, commercial and concessional loans from China totaling more than $12 billion. Ethiopia's ambassador to China recently stated that the two governments are in discussion to restructure the $2.9 billion loan for the railway between Addis Ababa and Djibouti "because it has put serious stress on our repaying capability." Ethiopia had previously extended the repayment period by 20 years. The Ethiopian ambassador denied that this is a "debt trap" situation.