Monday, March 12, 2018

What U.S. is doing to counter Chinese loans to Africa - Tillerson

U.S. Secretary of State, Rex Tillerson, on Monday repeated his warning to African countries to be very cautious about accepting offer of loans from China.

He suggested that needy African countries should exploit the opportunities offered by private foreign investors.

Tillerson stated that the United States is developing mechanisms in the form of ‘Public Private Partnerships (PPP)’ for infrastructure development as alternatives to Chinese loans for African nations.

Speaking at a press conference after a closed-door meeting with President Muhammadu Buhari at the Presidential Villa, Abuja, the U.S. diplomat said:

“I think it is important to clarify that we do not seek to stop Chinese investments from flowing to countries that need those investments. But what we are cautioning countries is to look carefully, that the implications of the level of debts, the terms of the debts, and whether the arrangements around the local financing are intact creating jobs, local capacity or the projects being carried out by foreign labour being brought to your country, is the structure of the financing such that you will always be in control of your infrastructure? Are there mechanisms to deal with the faults so that you do not lose ownership of your own assets? These are national assets whether there are ports, railways, or major highways.

“We have seen this occur in other countries that were not so careful and, as a result, they got themselves in a situation where they awfully lost control of their infrastructure, lost the ownership, the operation of it.

“And that is the precaution that we talking about. That there are international rules and norms and financial structure to deal with unforeseen circumstances, and I think we are just cautioning countries to look carefully. There are other alternative financing mechanism that are available and I think in particular of government creating the right conditions around those infrastructural investments. 

“There are also great potentials for public-private sector co-investing in the infrastructure. And we are developing mechanism that will also create alternative opportunities and financing offers.
“We have seen many, many around the world that did not work out so well and we are just saying, as friends, be careful.”
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