PRESIDENT Emmerson Mnangagwa on Sunday dismissed claims that the country may fall into a debt trap by China, saying a large portion of Harare’s debt to Beijing was for projects which generate revenue to service the loans.
He made the remarks during a meeting with Zimbabweans living in the United States, on the sidelines of the United Nations General Assembly, according to the country’s state news agency New Ziana.
China has emerged as a key investor in large infrastructure projects in Zimbabwe and has also extended concessional loans to assist in the development of the economies of many African countries.
However, some Western countries have claimed that the Chinese loans, which have funded several mega projects across Africa, leave many countries in a debt crisis.
Noting that there was nothing wrong with African countries accepting Chinese financing, the president said Zimbabwe had in particular benefited immensely from Chinese funding for the expansion of Kariba South Hydro Power Station, which added 300 MW into the national grid, and that of Hwange Power Station, which would add an additional 600 MW.
“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,” he said.
Finance and Economic Development Minister Mthuli Ncube, who is also in New York, said there was nothing sinister about the Chinese funding.
“We (Zimbabwe) have a very strong debt sustainability analysis framework which allows us to understand whether we are over indebted or not, and 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.