Chinese loans to Africa plummet to two-decade low

Chinese sovereign lending to Africa fell below US$1 billion last year – the lowest level in nearly two decades – underscoring Beijing’s shift away from a decades-long big ticket infrastructure spree on the continent, latest data has showed.

The drop in lending reflected in data from Boston University’s Global China Initiative comes as several African nations struggle with debt crises and China’s own economy is facing growing headwinds. Africa has been a focus of President Xi Jinping’s ambitious Belt and Road Initiative (BRI), launched in 2013 to recreate the ancient Silk Road and extend China’s geopolitical and economic influence through a global infrastructure development push.

Boston University’s Chinese Loans to Africa Database estimates Chinese lenders provided US$170 billion to Africa from 2000 to 2022.

But lending has declined sharply since a 2016 peak. Just seven loans worth US$1.22 billion were signed in 2021. Nine loans totalling US$994 million were agreed last year, marking the lowest level of Chinese lending since 2004.

While those two years coincide with the COVID-19 pandemic, researcher Oyintarelado Moses told Reuters that there are other contributing factors.

“A lot of that really has to do with the level of risk exposure,” said Moses, who manages the database and co-authored a report released on Tuesday.

While African governments largely welcomed Chinese lending and infrastructure projects, Western critics have accused Beijing of saddling poor nations with unsustainable debt. Zambia – a major Chinese borrower – became the first African country to default during the COVID-19 pandemic in late 2020. Other governments, including Ghana, Kenya and Ethiopia, are also struggling. – Reuters



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