Africa receives $4.61b in loans from China in ’23

Chinese lenders approved $4.61 billion in loans to Africa in 2023, the first annual increase since 2016, according to a study by Boston University’s Global Development Policy Centre.

From 2012 to 2018, Africa received over $10 billion annually from China, largely due to President Xi Jinping’s Belt and Road Initiative (BRI). However, lending dropped sharply after the COVID-19 pandemic began in 2020.

The 2023 figure, more than triple the amount in 2022, highlights China’s focus on managing risks tied to heavily indebted economies. Notable loans included nearly $1 billion from the China Development Bank (CDB) to Nigeria for the Kaduna-to-Kano Railway.

China, now the top bilateral lender for many African nations, has provided $182.28 billion in loans to the continent from 2000 to 2023, mainly for energy, transport, and ICT projects. Although Africa was central to the BRI’s early years, China’s lending began to decline in 2019, a trend hastened by the pandemic, leaving projects like Kenya’s railway link unfinished.

In 2023, over half of the loans, or $2.59 billion, were directed to regional and national financial institutions, reflecting a strategic shift. Additionally, nearly a tenth of the loans went to renewable energy projects. Despite these developments, the study suggests that China’s financial engagement in Africa remains unclear.

Attribution: Reuters

Subediting: M. S. Salama