Africa Update: African Union Discusses DRC’s Grand Inga. African Bankers Reject ‘Noise’ On Chinese Debt

August 3, 2019

African Union Meeting Revives Grand Inga Dam Project in Congo

The six-phase Grand Inga Dam Project in the Democratic Republic of the Congo (D.R.C.) has shown signs of coming back to life when the project was discussed at the African Union Extraordinary Summit meeting held Niamey, Niger July 4-7,

{Construction Review Online} reported July 31. On Congo River, two other dams, Inga-I and Inga-II had long been completed, generating about 1800 MW peak power. Inga-III, whose construction had fallen through for a number of reasons, is projected to create nearly 5,000 MW of power. Grand Inga is a considerably ambitious project. With 52 turbines, it would dam the entire river and flood 22,000 hectares of the Bundi valley, which is home to as many as 30,000 people. Five additional hydropower stations would considerably increase the generating potential of the falls. Once these additional hydropower stations were brought online at the dam site, the  whole project would dwarf any other hydropower facility worldwide. The Inga project is estimated to produce 40,000 MW. This is enough to provide power to nearly half of the continent, reported {Construction Review Online}.

D.R. Congo, in Central Africa, where the total electrical power installation is close to 15,000 MW.  Central Africa constitutes of ten countries: Angola, Burundi, Cameroon, Central African Republic, Chad, Republic of the Congo (Congo Brazzaville), D.R. Congo, Equatorial Guinea, Gabon, and Rwanda. Most of Central Africa’s power is generated from hydro.

African Bankers Reject “Noise” on Chinese Debt–We Have To Borrow for Development!

John Rawangombwa, chairman of the African Association of Central Banks, whose annual meeting in Kigali, Rwanda ended Aug. 1, told Xinhua that “the noise around the Chinese debt to African countries”–this was the subject of a presentation at the gathering–was “unfounded.” Chinese debt, as a percentage of total African debt, is not a problem, he said.

Rawangombwa pointed out that borrowing is good, and borrowing outside the country is acceptable, although internal borrowing would be preferable to reduce foreign exchange risk.

The reality, however, he stated, is that Africa faces a financing gap; so, nations must improve their debt management capacity, and borrow for the right purposes, an build up their capital markets.

He emphasized that countries must ensure that they invest in the right projects, that generate foreign exchange in order to be able to repay their debt. He also said that the fact that Africa’s debt has increased is not unique to Africa. Rather, it is a global phenomenon, that requires global management, Xinhua reported

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