The People’s Republic of China Monday signed a $5 million partial debt cancellation facility with the Malawi Government to concretise the debt relief package announced by China in August last year.
During the Forum on China-Africa Cooperation Conference, held virtually in August last year, Chinese Foreign Minister Wang Yi said the Chinese Government had waived 23 interest-free loans for 17 African countries.
Briefing reporters in Lilongwe after signing the agreement, Chinese Ambassador to Malawi Long Zhou said the waiver of Malawi’s debt will not be accompanied by any conditions.
Zhou added that the relief could effectively help Malawi reduce its debt burden, improve its investment environment and seek more international support to achieve a steady recovery of its economy
According to Zhou, China is committed to promoting the construction of a community with a shared future for mankind, regards Malawi as an equal cooperative partner and never attaches any political conditions to its assistance to the country.
“I sincerely hope that Malawi can take this opportunity to improve its debt structure, revitalise its economic development engine and achieve the various development goals of the Malawi 2063 vision at an early date,” Zhou said.
He added that China will always adhere to the diplomatic policy of maintaining world peace and promoting common development, and uphold the concept of sincerity, real results, affinity and good faith towards Africa, “as well as the correct view of righteousness and interests”.
“Under the framework of the Forum on China-Africa Cooperation, China will continue to strengthen pragmatic economic and trade cooperation with Malawi.
“[China will] solidly promote the implementation of the nine major projects between China and Malawi, maintain close communication with Malawi on debt issues and make unremitting efforts to promote the economic and social development of Malawi,” Zhou said.
As of December 2021, the People’s Republic of China was Malawi’s fourth top external creditor and was owed $239.22 million.
Finance Minister Sosten Gwengwe said the gesture by the Chinese government would give Malawi some relief and that the resources freed from debt service would be used for other development activities such as buying drugs for hospitals and buying textbooks in primary schools.
“In addition to this partial debt cancellation, our two governments are further engaged in negotiations for debt rescheduling to help us restore our debt sustainability to moderate risk,” Gwengwe said.
Since Malawi established diplomatic ties with Beijing over 10 years ago, the country has seen the world’s second biggest economy constructing Parliament Building, Bingu National Stadium, the Karonga-Chitipa Road, the Bingu International Convention Centre and The President’s Hotel, the Malawi University of Science and Technology and the Presidential Villas, among others.