China's Lending to Africa Reaches Near Two-Decade Low

China's Lending to Africa  Reaches Near Two-Decade Low
President Xi Jinping meets with Zambian president Hakainde Hichilema in Beijing (Xinhua)

The Lede: According to a new study from Boston University's Global China Initiative, Chinese sovereign lending to Africa fell below $1 billion in 2022, reaching its lowest level in nearly two decades. This comes as Beijing shifts away from large infrastructure projects on the continent.

What We Know:

  • Since its peak at $28.6 billion in 2016, China’s lending to Africa fell to $994 million in 2022. This marks the lowest level since 2004.
  • Boston University’s Chinese Loans to Africa Database estimates that $170 billion has been provided to Africa by Chinese lenders between 2000 and 2022.
  • The study identifies some trends including fewer loans extended over $500 million and a greater focus on social and environmental impacts that align with China’s goals to work toward greener initiative investments while lending in smaller amounts.
  • China is slated to host its third Belt and Road Forum for International Cooperation in October, marking the 10th anniversary of the infrastructure initiative. About 90 countries are expected to attend.

The Background: African governments have been generally receptive to Chinese lending and infrastructure projects, but critics have accused Beijing of predatory lending tactics that burden less wealthy countries with unsustainable debt. In late 2020, Zambia became the first African country to default on its debts during the COVID-19 pandemic. Foreign lenders agreed to restructure Zambia’s debt, much of which is held by China, earlier this year. Other African governments, including Ghana, Kenya, and Ethiopia, are also struggling with their debts held by China. China recently supported the African Continental Free Trade Area and the African Union’s accession to the G20. Beijing also announced a plan to deepen China-Africa cooperation on agriculture and food security at the latest BRICS meeting.

Likely Outcomes:

  • China’s challenges in the real estate sector, a weakening currency, and slowing global demand for its manufactured goods are likely contributing to the pullback in sovereign loans to Africa. These trends will probably continue in tandem into the foreseeable future. Two Chinese financial institutions that have been heavily involved with lending to Africa - the China Development Bank and the Export-Import Bank of China - have pivoted to support the domestic economy during this time. A significant amount of the overseas lending that remains is trending toward less far-flung markets.
  • Despite the economic headwinds that have played a part in reducing China’s extension of loans to Africa, the country’s concurrent political and diplomatic push in the last decade has won Beijing many friends among African countries. The latest political support for the inclusion of African organizations and countries being part of more international groups such as the G20 and BRICS demonstrates that Beijing is trying to act as a leader in bridging the gap between Africa and the rest of the international order, which has traditionally been led by the West.
  • The U.S., Japan, and other Western countries have recently made efforts to improve relations with countries in Africa. These include some vague promises to assist in economic development. Yet, those points of outreach come short of China’s long-term efforts that have created ties across the continent. As the West’s approach to dealing with the Russia-Ukraine War and rivalry with China persists, African countries may have to re-evaluate which side will serve their interests better.


“A lot of that really has to do with the level of risk exposure…China's domestic economy is playing a huge role here… I think there's still going to be interest from Chinese lenders. It's just that it's going to look different." – Oyintarelado Moses, data analyst and database manager for the Global China Initiative at the Boston University

Good Reads:

Chinese loans to Africa plummet to near two-decade low - study (Reuters)

China ramps up Africa engagement even as new lending drops (The Africa Report)