Exim Bank of China sets new rules for financing FOCAC projects in Cameroon

Chinese firms will henceforth execute investment in and take part in managing projects financed by Exim Bank of China in Cameroon. Photo: Kribi Deep Seaport archives.

Some 27African journalists on September 22, 2017 visited the head office of the Export-Import (Exim) Bank of China in the capital, Beijing, to find out how the financial institution works and its plans for the continent. Bank officials took turns to explain their activities in Africa to the journalists; sometimes country after country.

Debt burden

Zhang Shuo of the Concessionary Loan Department said the bank has decided on a new cooperation formula for Cameroon in order to reduce its debt burden. “It was recommended that Chinese companies not only execute Forum on China-Africa Cooperation, FOCAC projects financed by Exim Bank China and leave, but should henceforth participate in investing and running them,” she explained.

Officials of Exim Bank of China took turns to explain their activities in Africa. Photo: Kimeng hilton

According to Zhang Shuo, the measure is also meant to help raise the sense of responsibility of Chinese companies. “They will take proper care of projects because they are part owners,” Zhang stated. She made it clear that the change of policy was a joint decision of the Chinese government and Exim Bank of China to promote Africa’s development. She added that the bank’s support to Cameroon was one of the highest in Africa, though no figures were provided.

Cameroon-China trade

From 2008 to 2017, trade between Cameroon and China was about 2 billion US dollars. Between 2008 and 2015, China granted loans to Cameroon worth 3 billion US dollars - mainly for infrastructure, road construction and telecommunications development. In appreciation, Cameroon’s President Paul Biya on June 6, 2016, issued a decree exceptionally awarding the Medal of Grand Officer of National Valour to Li Ruogu, former president of Exim Bank of China.

The recipient was decorated in Beijing on May 19, 2017 by Cameroon’s Ambassador to China, Martin Mpana, on the occasion of Cameroon’s 45th National Day. The Ambassador said the bestowal was in recognition of Li Ruogu’s facilitation of Cameroon’s receipt of financial assistance from Exim Bank of China between 2009 and 2015. He added that the conferment by President Biya was in acknowledgement of Li Ruogu’s “high level of respect and managerial skills.”

Journalists want to know what plans Exim Bank of China had for their countries. Photo: Kimeng Hilton

Exim Bank team visits Cameroon

On July 28, 2017, Cameroon’s Prime Minister Philemon Yang, received a delegation from Exim Bank of China in the capital, Yaounde. Led by its Chairperson, Hu Xiaolian, the team was accompanied by the Chinese Ambassador to Cameroon Wei Wenhua. The meeting was also attended by the PM’s aides and the Minister of the Economy, Planning and Regional Development, Louis Paul Motaze.

Hu Xiaolian told the press after the meeting that her bank will henceforth extend funding of Cameroon’s projects to agriculture and industrialization after focusing on infrastructure and energy. She added that the visit was to strengthen cooperation with Cameroon and synchronize the projects they finance in the country. Hu Xiaolian promised her bank’s continuous support to Cameroon’s efforts to become a middle income nation by 2035.

Journalists at Exim Bank headquarters

During the visit by African journalists, Yuan Xingyong, Exim Bank of China Vice President, described Africa as one of the most dynamic regions in the world in terms of economic growth. He said forecasts suggest that Africa’s economy will grow by 3.4 percent in 2017. Moreover, the continent is set to become the second fastest growing region in the world after Asia, Yuan Xingyong predicted.

Reviewing Exim Bank of China’s activities in Africa in the past few years, Zhang Shuo said under FOCAC, there has been an increase in concessionary loan facilities. Loans in 2012 totalled 20 billion US dollars, while 35 billion US dollars in export credit was allocated at the FOCAC summit in South Africa in 2015. They are now implementing commitments reached at the FOCAC South Africa summit, Zhang explained.

African investments

As at now, Chinese investments in Africa stand at 100 billion US dollars, while over 3,000 Chinese firms have been brought into continent. Exim Bank’s focus is on national economic cooperation, he said. Currently, there are over 600 Chinese projects worth 300 billion RMB going on in Africa. Some of the bank’s core principles are shared interest, sincerity, mutual respect, equality, etc.

So far, 10 loan agreements have been signed with Africa this year, while Exim Bank has financed projects in about 50 countries since it started operations in the continent in 1996. The projects include the construction of Kribi Deep Seaport in Cameroon, rehabilitation of Victoria Falls International Airport in Zimbabwe and building of the Nairobi-Mombasa Standard Gauge Rail line in Kenya, which created about 38,000 local jobs.

Victoria Falls International Airport in Zimbabwe was recently rehabilitated with funding from Exim Bank of China. Photo: Zimbabwe archives

Project guidelines

“We respect local customs, national laws and stick to the target of improving development,” Yuan Xingyong noted. Our cooperation should be felt by both Chinese and African people in terms of results, he continued. A deal was signed with Ethiopia this year for the construction of a wind power plant in the north of the country, it was also disclosed.

In order to facilitate work on the continent, Exim Bank of China has set up offices in several parts of Africa. “Our work in Africa under FOCAC is to carry out concessional loan facilities of the Chinese government for infrastructure, energy, basic industries and agricultural projects as the only such bank in China,” another official pointed out.

*Kimeng Hilton Ndukong, a contributor to People’s Daily Online, is Sub-Editor for World News with Cameroon Tribune bilingual daily newspaper in Cameroon. He is currently a 2017 China-Africa Press Centre, CAPC fellow.