World Bank President concerned about China’s loans to Africa

LONDON: World Bank President David Malpass has said he is concerned about some of the loans China has been making to developing economies in Africa, according to a media report.

David Malpass says the terms and conditions need to be “more transparent”, BBC reported.

It comes amid worries that countries including Ghana and Zambia are struggling to repay their debts to Beijing, BBC reported.

China says that any such lending is done within international rules.

Developing countries often borrow money from other nations or multilateral bodies to finance sectors that will grow their economies such as infrastructure, education and agriculture.

However, steep increases in interest rates in the US and other major economies over the last year are making loan repayments more expensive because lots of that borrowing is done in foreign currencies such as US dollars or euros, BBC reported.

It is a particularly acute problem for developing economies who can struggle to find the extra money that is required as the relative value of their own currency falls.

It is a “double whammy and it means that (economic) growth is going to be slower”, says Malpass.

Tackling that challenge and its consequences was one of the main reasons for this week’s visit by US Vice-President Kamala Harris to three African countries. It is a visit that comes with big commitments of financial support to Tanzania and Ghana.

There is a growing rivalry with China for influence in the continent, whose abundance of natural resources include the metals, such as nickel, crucial for the batteries needed for technology such as electric cars, BBC reported.