Chinese N$10bn loan still on the table
23 April 2019 | Economics
The Namibian government is under no obligation to take up any loan offered to as part of a memorandum of understanding signed during the Forum on China Africa Cooperation summit held in Beijing last year.
This was said by the Chinese embassy’s deputy mission head, Yang Jun, last week. Namibia had been offered a N$10 billion concessionary loan by the Chinese government, which Jun described as very attractive. The loan facility was still being discussed, Jun said.
It forms part of an attractive concession loan which, according to Jun, is more attractive than existing loans offered by development fund institutions such as the African Development Bank (AfDB).
The loan would consist of a grant and a concessional loan offered at an interest rate of only 2%, the Namibian Broadcasting Corporation reported last year during the Focac summit.
“We did make contact with the Namibian government but both sides [Namibian and Chinese governments] have not [yet] reached an agreement,” said Jun.
According to him, these offers are meant to help developing countries and are not being forced down the throats of African leaders.
“For Namibia this can provide good initiatives from which to benefit from the Belt and Road initiative. It can offer assistance to Namibia in terms of development,” said Jun.
He highlighted the construction of the Husab uranium mine, the construction of several roads and the new container terminal at the port of Walvis Bay as some examples.
Finance minister Calle Schlettwein did not respond to a query about the loan arrangement. Schlettwein had been quoted as saying last year that the funding proposal had been included in Namibia’s debt strategy.
“This funding proposal was included in our debt strategy covering the next two medium-term expenditure framework (MTEF) periods,” Schlettwein told The Namibian last September.
“Each project still needs to be considered by Cabinet once they are ready. It is only then that the government will be entering binding agreements,” he said.
Part of the loan is earmarked for the upgrading of Hosea Kutako International Airport and the construction of four rural schools and 400 houses.
The summit, which attracted many African leaders, saw US$60 billion being put on the table for infrastructure development on the continent as part of China’s Belt and Road initiative.