Good News: China Ready to Listen to Nigeria, Other Countries on Debt Forgiveness, Gives 3 Conditions

• China is open to hearing proposals from Nigeria and other countries regarding debt restructuring
• This move by China could signal a willingness to cooperate and work towards mutually beneficial solutions with countries
• Nigeria, along with several African countries, has been struggling with massive debt

Good news for Nigeria and other African countries as China has expressed its readiness to listen to their concerns on debt restructuring.

However, the giant Asian country has made several demands before a final decision can be reached.

Bloomberg revealed that a spokesman for the Chinese Foreign Ministry at the Global Sovereign Debt Roundtable proposed three conditions before its country decides.

China gives demands for forgiving debts

The first is that multilateral creditors, which include World Bank and International Monetary Fund, need to come up with solutions for their participation in debt treatment as soon as possible.

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Second, the IMF has to take action in information sharing on debt sustainability assessments as soon as possible.

While the third condition is that the parties concerned have to agree on the specific way for creditors to participate on comparable terms as soon as possible.

He, however, failed to give a timeline for when the debt restructuring will commence.

China's lending spree

Over the years, China has been criticised for its lending practices, which some experts say can lead to a "debt trap" for developing countries.

China has lent more than $500 billion to developing countries through its lending program, making it one of the world’s largest creditors.

A recent report by Chatham House, the London policy institute, reveals that Chinese lenders account for 12% of Africa's total public and private debt.

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Nigeria's debt to China stood at $3.63 billion (N1.66trn) as of the end of December 2022, according to data from the Debt Management Office.

Countries like Sri Lanka, Ghana, Ethiopia, and Pakistan, which China has heavily lent to, have already defaulted or are on the cusp of doing so.

Nigeria repays China, Islamic bank, others N3.63tn debt

Meanwhile, in another report, Legit.ng revealed that Nigeria has successfully repaid part of its debt to countries and institutions.

The report provided a breakdown of how the money was paid to China and Islamic banks, among others.

Although the repayment is good news, the Nigerian government has borrowed another N6.69 trillion.

Source: Legit.ng