Capital Ethiopia Newspaper

China loans 600 million dollars to Ethiopia over five months

The People’s Republic of China has granted 612 million dollars worth of loans to Ethiopia during the first five months-July to November- of the budget year, Deputy Prime Minister and Foreign Minister Hailemariam Desalegn said on Tuesday.
The loan sourced from the world’s second biggest economy has put China at the top of Ethiopia’s strategic partners detailed by the DPM in his report to the House of Peoples’ Representatives earlier this week.
Hailemariam reported to the House that while China provided the biggest chunk of loans, the United States, Saudi Arabia, Czech Republic and Switzerland followed with 52, 25, 1.7 and 1.4 million dollars loans and grants respectively.
The World Bank also provided 210 million dollars while Agriculture Development Fund’s 100 million dollars’ of aid together with the bilateral deals helped the country secure a total of one billion dollars worth of grants and loans in the five month period.
Looking at China’s over 60 percent contribution from the loans and grants with concern opposition MP Girma Seifu asked “Why China?!” “Why is China taking the lead; is it because the government is leaning to the left or is it because we could not meet the requirements of the West for aid,” the alone opposition MP said in questions addressed to Hailemariam during Tuesday’s regular session.
“We are color blind when it comes to dealing with countries; if it is at the interest of our nation we deal with any one regardless of color or ideology,” Hailemariam downplayed any political reasons to the growing economic ties between China and Ethiopia.
“As you know the West itself is borrowing in billions from China; the United States and even recently to stabilize the European Union countries it’s China which as excess reserves to lend these economies. If we have the capacity to return and consume, China can provide more loans,” Hailemariam responded to Girma.
Rights groups often accuse China of providing support to authoritarian governments without any regard to the regimes’ crackdown on human rights. China, with a one party state but a booming economy is feared by the West’s pundits as a bad example for African countries. Prime Minister Meles Zenawi however snubbed Western donor countries and praised India and China as ‘dependable allies’ at his latest party congress back in September 2010.
The PM during the congress advised African countries to take advantage of the new global frontier, created after the economic and financial crises. According to him, the stabilized political scene is ready to withstand pressure from “market fundamentalists”.
According to the Premier the financial and economic crises that were triggered by Western countries have inadvertently opened new opportunities for Ethiopia and other African nations to forge strong links with nations other than the traditional economic powers.
“The crisis was the crisis of the neo-liberals [market fundamentalist] and they were the ones who were hurt the most,” Meles told his party’s congress that collected an elite 1000 members in Adama, Oromia region for a three day congress.
Meles insisted that Africa should go pursue partnerships with the booming economies of China, India and Brazil. He argued that economies like Japan and other Asian countries have savings surpluses, against Western countries whose increasingly high trade deficits have contributed to their lower savings rates.
Present at the EPRDF congress was a delegation of the Communist Party of China led by Zhang Xuan, an alternate member of CPC central committee and deputy secretary of CPC’s Chongqing Municipal Committee. The delegation in its address to the EPRDF congress vowed that China will intensify its cooperation with Ethiopia.