Finance minister Calle Schlettwein has once again vehemently trashed allegations that the Chinese have captured the local economy through lending the country huge sums of money saying that Chinese concessional loans make up only 2.6% of the total debt the country is sitting on.
The total amount of debt the country has on its back stands at N$76.6 billion at the moment.
As per the bilateral arrangement between the two countries, Namibia has benefitted from China in grants to the tune of N$1.3 billion, interest free loans at N$302 million and concessional loans worth N$1.7 billion.
“These loans were offered and were provided with mutual understating between the two governments and contain concessional terms and conditions as opposed to market loans or other borrowing like those provided for by Development Financial Institutions and the bonds market,” said the minister.
At the same time, Namibia sourced a total of N$1.99 billion in loans from the China Export Import Bank.
He said the terms for the concessional loans are as follows; 2% interest, 0.5% commitment fees on undisbursed balance of the loan, 5 years’ grace period before repayment of principal starts and a 15-year repayment period.
Chinese loans also come with Chinese contractors having to work on funded projects but the minister was quick to point out that locally available material get to be used and these include, bitumen from Okahandja, diesel, sand and stone above the 20% Namibian company participation.
Media reports of the Chinese taking over business in the north and erecting hardware’s that sell cheap, kicking local businesses out of the economy have gone rife and cemented the Chinese-capture phobia.
Many have also raised eyebrows and wagged tongues on the mere size of the Chinese Embassy which is thought to be a statement that “The Chinese are here to stay.’
While politicians have also raised a hue and cry over semi-skilled Chinese shipping into the country to be wheelbarrow pushers, painters and drawers of water, jobs locals can easily handle, Schlettwein said the task is up for immigration and labour to correct.
Chinese borrowings have seen the constructions of the National Youth Centre, Omakange Ruacana roads (60Km), Engela Uutapi roads (90Km), provision of scanners at all boarder entry points, TransNamib locomotives as well as Electronic Documents Recording Management Systems (EDRMS).
Said the minister, “The debt service towards Chinese loans includes capital repayment and interest and, in total, amounts to N$65 million.”
This makes up only 1% of the country’s total debt servicing obligation, he emphasised.
“We should also objectively and factually address the alleged state capture by China. What is this purported to entail? For the size of our economy, government operations account for about 57% and the private sector, mainly mining, wholesale and retail trade, financial intermediation and the tertiary services sector does not reflect predominance of Chinese ownership,” he said.
Namibia utilises four categories of debt to fund budget deficits, the most significant one being the domestic debt market (N$51.3 billion debt take-up), foreign (N$17.6 billion), bilateral debt (N$1.1 billion) and multi-lateral instruments (N$6.7 billion).