By Tom Mwangi, Africa editor
Nairobi, Kenya (Somalistandard) – The president of the World Bank, David Malpass, has expressed concern over China’s loans to developing economies in Africa, stating that the terms and conditions need to be “more transparent”.
Malpass has joined a growing number of voices who are concerned that countries like Ghana and Zambia are struggling to repay their debts to Beijing.
While China insists that its lending is done within international rules, critics argue that the loans come with onerous conditions and often leave recipient countries in a worse position. Developing countries often borrow money from other nations or multilateral bodies to finance sectors such as infrastructure, education, and agriculture.
However, recent steep increases in interest rates in the US and other major economies have made loan repayments more expensive, as much of the borrowing is done in foreign currencies such as US dollars or euros. This is proving to be a particular problem for developing economies that can struggle to find the extra money required as the value of their own currency falls.
In an interview with the BBC, Malpass warned that this is a “double whammy” and that it will likely result in slower economic growth.
His comments come as the World Bank and the International Monetary Fund prepare to meet in Washington, where they will discuss global economic issues and the challenges facing developing countries.
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