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New Business Trends  Eastern Trade
New wave of lending to Africa ‘a concern’
The Group of Eight (G-8) industrialised powers warned on Saturday that irresponsible lending practices could condemn Africa to a new round of crippling debt, with Germany singling out China as a potential risk to the continent.
G-8 finance ministers raised the alarm at a two-day meeting near Potsdam during which they also vowed to make good on African aid pledges and insisted that Africa itself was responsible for applying sound financial management.
German Finance Minister Peer Steinbrueck said Chinese lending practices in Africa, driven by a need to acquire natural resources, ran counter to those advocated by the G-8, which sought to avoid a return to heavy debt accumulation by poor states.
“We see there’s a growing interest by China related to African resources, and by their relation to African states they are willing, when buying resources, to re-launch … what we wanted to break with our debt relief”, a new cycle of overwhelming indebtedness on the continent.
But he said that at a coming meeting of the Group of 20 emerging market states, including China, lending policies in Africa would be on the agenda.
While Germany had wanted China to be cited specifically for what it said was an example of potentially harmful lending, a final statement made no mention of Beijing.
In a paper prepared ahead of the meeting, Germany criticised China for lending money to Africa too freely without checking where it was going or if it could be repaid.
US Deputy Treasury Secretary Robert Kimmitt said “official lending … to Africa threaten the hard-won gains from recent debt relief initiatives”.
Source - Business Day
new business trends  eastern trade |
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section specialist
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Jaqueline Martinez
Jaqueline studied Public Relations and Journalism at CPUT between 2001 and 2003. She completed Information Systems and Communication Science 101 at Unisa. She teethed on business journalism as a communication specialist with Old Mutual for several years. Jaqueline travelled to Asia and the US teaching English before returning to South Africa and finding her niche as an online editor and features writer with BizAssist Technologies and SA Guide to Business Opportunities.
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