Chinese lending to Africa fell below $1 billion last year, the lowest level in nearly two decades, underscoring Beijing’s shift away from a decades-long big-ticket infrastructure spree in Africa.
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 faces headwinds.
The Belt and Road Initiative (BRI) was launched in 2013 to recreate the ancient Silk Road by extending China’s geopolitical and economic influence through a global infrastructure development push.
Boston University’s Chinese Loans to Africa Database estimates that Chinese lenders provided $170-billion to Africa from 2000 to 2022. However, lending has declined sharply since a 2016 peak. Just seven loans worth $1.22-billion were signed in 2021. Nine loans totalling $994-million were signed in 2022, marking the lowest level of Chinese lending since 2004.
Researcher Oyintarelado Moses told Reuters that it was not just about Covid-19.
‘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.
Western critics have accused Beijing of saddling poor nations with unsustainable debt.
Zambia, a major Chinese borrower, became the first African country to default in late 2020. Ghana, Kenya and Ethiopia are also struggling.
China, meanwhile, is fighting to revive growth amid persistent weakness in the property industry, a faltering currency and flagging global demand for its manufactured goods.
‘China’s domestic economy is playing a huge role here’, said Moses.
The China Development Bank and the Export-Import Bank of China have been redeployed to support the domestic economy.
The Boston University analysis found that China now issues fewer loans of over $500-million and focuses more on social and environmental impacts.