Zimbabwe President Mnangagwa Dismisses China Debt Trap Fears

FROM EIR DAILY ALERT

Zimbabwe President Mnangagwa Dismisses China Debt Trap Fears

Sept. 26, 2018 (EIRNS)—Speaking to a gathering of Zimbabweans on the sidelines of the UN General Assembly, Zimbabwe President Emmerson Mnangagwa dismissed the fraudulent fears that Zimbabwe could fall into a trap with Chinese debt. Mnangagwa said most of the money coming from China was going towards revenue-generating infrastructure projects that would pay themselves off.

“During (Zimbabwe’s) period of isolation, very few countries outside the West assisted us. Some of the notable countries which came to our assistance are China, India, Brazil, Russia and Malaysia. And when things are good, you then do not forget your friend who stood with you during bad times, but you do not sell your country because somebody stood with you during bad times.

“What is necessary when you get loans or investment, it must be structured. (There is need for) investment in projects which can re-finance themselves to pay the loan.”

Mnangagwa gave the example of the expansion of Kariba South and Hwange power stations, which are financed with Chinese capital. “I do not see any danger where you have a project which becomes productive in terms of revenue streams to pay for itself,” he said. “When you finish paying the loan, the asset remains with us and we will continue to have electricity, so I do not see the danger there.”

Backing the President’s remarks, Finance and Economic Development Minister Professor Mthuli Ncube said China is “where the money is.”

“We have a very strong debt sustainability analysis framework which allows us to understand whether we are over indebted or not, (whether) we can pay or not. The Chinese also do that analysis themselves and if they find out that you cannot pay they do not lend you the money, this is not free money,”

he said.