STR/AFP

The German government is getting behind an initiative to open up alternative financing for African countries tempted by Beijing's no-strings-attached loans. The idea? Set up African bond markets that can attract international capital.

Berlin has presented its initiative, part of its agenda as president of the G8 group of industrial nations, as part of an effort to help African countries to insulate themselves against rapid swings in international exchange rates. However, Thomas Mirow, deputy finance minister, said the move would also address concerns fuelled by Beijing’s policy of granting generous, unconditional loans to African countries as a way of securing access to these countries’ resources and markets.

The initiative is a sign of just how nervous Western officials are about losing the powerful leverage that lending has provided them.