According to a recently released independent study, Chinese lenders approved $4.61 billion in loans to Africa last year, the first annual increase since 2016.
Between 2012 and 2018, Africa received over $10 billion annually from China, mainly due to President Xi Jinping’s Belt and Road Initiative (BRI). However, with the outbreak of the COVID-19 pandemic in 2020, loans dropped sharply, Reuters reported.
The 2023 figure is more than three times higher than last year and suggests China is focusing on risk management in high-indebted economies, according to Boston University’s Global Development Policy Center.
This new data comes as Beijing prepares to host African leaders for the upcoming Forum on China-Africa Cooperation, which is held every three years. According to the study, 13 loan agreements were signed last year, involving eight African countries and two African multilateral lenders.
According to a Boston University study, China lent a total of $182.28 billion to the continent between 2000 and 2023, with much of the funding going to Africa’s energy, transport and ICT sectors.
In the early years of the Belt and Road Initiative (BRI), Africa played an important role as China sought to revive the ancient Silk Road while expanding its geopolitical and economic influence through global infrastructure investments.
However, starting in 2019, China began to reduce its lending, a trend that intensified during the pandemic and resulted in several projects across the continent being left uncompleted.
The decline in loans from China was due to domestic political pressures in China and the rising debt burden of many African economies. Since 2021, countries such as Zambia, Ghana and Ethiopia have been going through lengthy debt restructuring processes.
According to the Boston University study, more than half of last year’s loans – $2.59 billion – went to regional and national lenders, reflecting a shift in Beijing’s strategy to mitigate risks while maintaining its influence across the continent.
The Global Development Policy Centre noted that the long-term quality of China’s partnerships in Africa remains uncertain.