BEIJING: China needs to step up its financing for Angola if the African nation is to absorb more Chinese-made goods from solar panels to electric cars, Angola’s finance minister said on Tuesday, as the former OPEC member considers vying bids from Beijing and Europe. China approved loans worth $4.61 billion to Africa last year, the first annual increase since peaking at $28.4 billion in 2016, when 68 percent of lending went to Angola alone, even as it began to turn off the cash spigot and move away from big-ticket infrastructure projects as resource-rich Africa struggles with a growing debt crisis and grasps for quicker financing solutions.

Since quitting the Organization for Petroleum Exporting Countries (OPEC) in December, Angola has been looking for ways to firm up its finances and food security, grow its fisheries sector and attract more job-creating investment inland, Vera Daves De Sousa said in an interview with Reuters ahead of a major China-Africa summit in Beijing.

The littoral state has plentiful reserves of base metals and ample agricultural resources such as sugar cane, coffee, cotton and livestock, but they have been neglected compared with oil, which accounts for 95 percent of its exports. China has expressed willingness to help Angola modernize its agricultural sector, grow its industries and diversify its economy in exchange for imports of more Chinese goods, but faces competition from the West.

“This is a tough discussion, because in our case, this comes together with the financing solution,” Daves de Sousa said. “If Angola’s fiscal revenues were strong enough to allow us to choose based on the criteria of quality and price, we would have a totally different discussion.”

Beijing’s pitch would not only need to include further financing to help Luanda bring down high inflation and grow jobs in the short term, but also ensure it had robust industries it could depend on into the future, Daves De Sousa added. Otherwise, China could lose out to competition from Europe, who Daves De Sousa said required Angola to buy its wares but had been funneling fresh financing more readily in exchange.

“We will buy more solar panels from Europe because the financing is coming from there.” The US and Europe maintain the $19 trillion Chinese economy has overcapacity in EVs and solar panels. With Western curbs on Chinese exports looming, finding buyers for those goods is top of the agenda for Beijing as it plays host to the ninth Forum on China-Africa Cooperation Summit this week.

China, the world’s biggest bilateral lender, has already started tweaking conditions for its loans to the continent, setting aside more for solar farms and EV plants, while cutting back on big-ticket infrastructure. Luanda is not looking for more loans, Daves De Sousa said, instead preferring to “find a new paradigm where we do more based on private-sector engagement and through public-private partnerships”.

“We need to think outside the box, because the plain vanilla solutions of ‘you give me money, I’ll give you collateral’ is done.” – Reuters