China has written off an unspecified amount of Zimbabwe’s interest-free loans and has pledged to help the government find a way out of its ongoing debt crisis.
“China attaches great importance to resolving Zimbabwe’s debt issues,” said Beijing’s ambassador to Harare, Zhou Ding.
As of September 2023, Zimbabwe’s publicly guaranteed debt stood at $17.7 billion, of which $12.7 billion was external and $5 billion domestic.
Most of its foreign debt was purchased from China, as it is ineligible for loans from multilateral creditors after defaulting on repayments for over 20 years.
Since the fall of long-time ruler Robert Mugabe six years ago, Zimbabwe has been struggling to reach an agreement with creditors to restructure its unsustainable debt.
But critics warn that China’s latest gesture is simply creating a permanent debt trap, providing Beijing with political leverage as it seeks to counter US influence in Africa.
China vehemently denies these accusations, saying its relations with African countries are based on its policy of non-interference in other countries’ affairs.
As Zimbabwe drowns in debt and faces a devastating drought, it recently relaunched its currency for the third time in a decade following periods of hyperinflation.
Authorities say this latest reinvention will provide relief to citizens, who are increasingly struggling to buy petrol and put food on the table.
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