REUTERS
Chinese lenders approved loans worth $4.61 billion to Africa last year, marking the first annual increase since 2016, an independent study showed on Thursday.
Africa secured more than $10 billion in loans a year from China between 2012-2018, thanks to President Xi Jinping’s Belt and Road Initiative (BRI), but the lending fell precipitously from the start of the COVID-19 pandemic in 2020.
Last year’s figure, a more than three-fold increase from 2022, shows China is keen to curb risks associated with highly indebted economies, the study by Boston University’s Global Development Policy Centre found.
“Beijing appears to be looking for a more sustainable equilibrium level of lending and experimenting with a (new) strategy,” said the university centre, which runs the Chinese Loans to Africa Database project.
The new data comes as Beijing prepares to host African leaders next week for the Forum on China-Africa Cooperation, which takes place every three years.There were 13 loan deals last year involving eight African countries and two African multilateral lenders, the study found.
Last year’s biggest items include a nearly $1 billion loan from China Development Bank to Nigeria for the Kaduna-to-Kano Railway and similar size liquidity facility by the lender to Egypt’s central bank.
China has vaulted to the top bilateral lender for many African nations like Ethiopia in recent years.It has lent the continent a total of $182.28 billion between 2000-2023, the Boston University study found, with the bulk of the finances going to Africa’s energy, transport and ICT sectors.
Africa featured prominently in the initial years of BRI, as China sought to recreate the ancient Silk Road and extend its geopolitical and economic influence through a global infrastructure development push.
China, however, started to turn off the cash spigot in 2019, a shift that was accelerated by the pandemic, leaving a series of incomplete projects around the region, including a modern railway meant to link Kenya with its neighbours.
