Ethiopia's top envoy to China said that they are renegotiating their billions of dollars-worth loans to avoid the risks of being buried into "serious" debt woes with the Asian nation. Ethiopia, recently, signed an agreement with China to build railroad links that will connect its capital to neighboring Djibouti.
The agreement is part of China's global infrastructure initiative that is criticized to set poorer countries into a "debt trap". China plans to re-establish the "silk road" in its plan to connect the continents through its infrastructure projects like building ports, train links, and other projects to ease transportation of products from China to other parts of the world and vice-versa. The United States and other nations, however, claim that it is a bold move from the Asian economic giant to expand its influence all over the globe.
Ethiopia's ambassador to China, Toga Chanaka, defended China's trade and infrastructure plan despite the increasing debt pressure on Ethiopia. Chanaka said during an interview at his residence in Bejing with the South China Morning Post last week that those who may think this is an investment that is not worth investing on the Chinese side, I think that's wrong because if you are talking from an economic rationale, I think it makes a lot of sense.
In a statement to the South China Morning Post, Mr. Chanaka said, "Those who may think this is an investment that is not worth investing on the Chinese side, I think that's wrong because ... if you are talking from an economic rationale, I think it makes a lot of sense."
China's belt and road initiative plan to collaborate with more than 60 nations globally in the construction of roads, railroads, ports, and pipelines along land and sea routes in Asia Africa, and Europe through state financing.
The report of the John Hopkins University in 2018 said that As a top destination for Chinese loans in Africa and the continent's fastest growing economy, Ethiopia has received over $12.1 billion from China's state policy banks since 2000.
The China-financed Addis Ababa-Djibouti Railway serves as an important part of China's Belt and Road initiative in the African continent since it is the connection between Ethiopia and the Port of Doraleh. The port is a multipurpose port located in the west of the Djiboutian capital of Djibouti City.
