(Adds Strauss-Kahn comments, China bank on farm investments)
By Daniel Magnowski and Vincent Fertey
NOUAKCHOTT Aug 1 African finance ministers and
central bankers met IMF and World Bank counterparts on Friday
hoping to hammer out guidelines on handling a tide of new
investment into the continent, much from resource-hungry China.
China, Brazil and India have been tying up infrastructure or
loan deals in African countries, often in return for oil, metals
and other resources, raising concerns among traditional lenders
like the International Monetary Fund (IMF) and World Bank.
"It's good news that there are new sources of financing, but
we have to be very careful in order that this new financial help
does not destroy the original policies of the Bretton Woods
institutions that aim to cancel debt," IMF Managing Director
Strauss-Kahn told Reuters in an interview during the meeting.
The Caucus meeting in Mauritania brought together cental
bankers and finance ministers from the poorest continent.
"We decided to set aside a day to talk about non-traditional
financing sources, that is, China, India, Brazil and sovereign
wealth funds, in order to clarify the way the IMF and World Bank
appreciate the interests of these new sources of financing in
Africa," said Ousmane Kane, Mauritanian central bank governor
and President of the African Caucus of the IMF and World Bank.
Besides loans, deals with China often involve Chinese
workers building roads and other infrastructure projects, while
natural resources move the other way, and the sums are awesome.
IMF officials say they must examine the debt implications of
a $9 billion mining and infrastructure deal between China and
Democratic Republic of Congo before deciding if Congo will
qualify for an IMF programme and subsquent debt relief package.
Opposition politicians and anti-graft groups in Niger have
criticised the lack of transparency surrounding a deal between
the government and China's state oil company CNCP which could be
worth $5 billion to one of the poorest countries on earth.
CHINA TO BOOST FARM INVESTMENTS
The China Development Bank said it was "anxious" to work in
agriculture and plans further farming investments on the
continent, where it has granted loans worth several hundred
million dollars, mostly to processing companies in East Africa.
"(The) China Development Bank is willing to share its
experience and provide financing to agricultural development in
Africa," Governor Chen Yuan told the Caucus.
Yuan said that in the current food and fuel crisis, Africa
should make agricultural development its "top priority".
Despite rising prices for many of Africa's commodity exports
in recent years, many economists worry countries who have
benefited from huge debt forgiveness packages risk plunging into
a new round of unsustainable borrowing from new lenders eager to
secure access to oil and minerals.
"A big concern is debt. Lots of debt has just been wiped
out, and now with China coming, are we going to see a new cycle?
Prices of oil and other resources are high at the moment, but if
prices drop, African countries will still have to pay interest
on loans from China," said a delegate who asked not to be named.
African countries, rather than lenders, must be responsible
for fully assessing the future obligations to which they commit
by accepting loans from new sources, Mauritania's Kane said.
"We are for transparency ... The meeting aims to clarify the
position between traditional and non-traditional financing
sources, but most important is that Africa has to give its
position to these non-traditional sources, to tell them what
they have to do for us," he said.
Chinese interests in Africa have mushroomed in recent years.
"Like it or not, China is a big part of Africa now," another
(For full Reuters Africa coverage and to have your say on the
top issues, visit: africa.reuters.com)
(Editing by Alistair Thomson, editing by David