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China says it has forgiven Cameroon for about $78 million debt. The move from part of Chinese support to help ease economic hardship in the central African country.
The announcement was made late last week after a meeting between President Paul Biya and Yang Jiechi, a special representative of the Chinese President Xi Jinping in Yaounde.
The said amount was due to be repaid in 2018 as part of the country’s estimated $5.7bn total debt burden. The figure is from the public body managing Cameroon’s external debt.
Analysts have, however, expressed reservations about Beijing’s motives with an economist averring that it may be linked to annexing greater access to natural resources.
“China wants to control the sub-regional market and Cameroon is the gateway,” economist Ariel Gnitedem told the reporters.
“It is possible they also want a greater share in the enormous natural resources in Cameroon which are essential to feed its home industries,” he added.
President Biya joined his African counterparts at the Forum for China – Africa Cooperation, FOCAC summit held in September 2018 in Beijing. Biya met with Jinping and reportedly requested for the repayment waiver.
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Cameroon like most other African countries continue to turn to China for loans to largely finance infrastructure projects. Analysts have raised issues about the non-sustainability of these loans.
Governments have routinely rejected the concerns stating that the relationship was based on mutual respect for both parties. China has also provided wide ranging support to the continental bloc, African Union.
The United States got into a diplomatic spat with China over its financial dealings with Africa stating that Africa was been shackled with Chinese money.
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Egypt Ranks 2nd Amidst World Emerging Economies.
CBN signals end to official rate regime for naira
The Central Bank of Nigeria (CBN) may soon allow the naira to freely find its value, with a possible depreciation on the official rate, usually pegged at about N305/$, an update on its website has indicated.
The development is signaling an end to the most criticised foreign exchange rate window, which has been used mostly for government’s critical businesses that affect the public, particularly the importation of petroleum products.
If the move sees light of day, it will mean that the value of the naira at the official window is depreciated with its concomitant closure of the peg.
Yesterday, the apex bank, as opposed to the usual publication of the fixed exchange rate, opted to publish that “the rate will be market-determined.”
According to a report, the President of Shippers Association of Lagos State, Jonathan Nicol, said the Nigeria Customs Service had allegedly directed importers to pay for duties at the rate of N326 per dollar against the official rate of N306, citing an order from the CBN.
Also yesterday, the interbank rate depreciated by 0.2 per cent to N360.43 per dollar at the close of trading, while the parallel market remained steady at N360 per dollar.
A move toward a market-determined exchange rate would be welcomed by investors, who have long accused government of some level of capital controls and bemoaned multiple exchange rates.
The Chief Executive Officer of Nigerian Investment Promotion Council, Yewande Sadiku, was quoted as saying the apex bank was in talks with other agencies to move to a single rate for the nation’s currency.
For an economic analyst at Ecobank, Kunle Ezun, “putting that on the website means the central bank is gradually moving towards a single exchange-rate window. It is making the exchange rate more liquid to attract more inflows.”
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