Chinese loans to Africa back to pre-pandemic volume but show new approach to risk

Name: What does it mean for the world when Chinese consumers tighten their belts?
Uploaded: 2024-09-01T06:00:21.000Z
Duration: 13 min 4 s
Description: What does it mean for the world when Chinese consumers tighten their belts?

‘We’re unlikely to see many more Chinese-financed megaprojects’, analyst predicts after latest data on Chinese loans to Africa published

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The release of the new data comes as Beijing prepares to host the 9th Forum on China-Africa Cooperation, traditionally a time for China to make huge financial pledges for major African infrastructure projects. Photo: Reuters

Jevans Nyabiage

Published: 2:00pm, 1 Sep 2024Updated: 4:56pm, 1 Sep 2024

Last year, Chinese lenders advanced their largest volume of lending to African countries since before the pandemic, a new study has shown.

However, while the US$4.61 billion loaned was the highest since 2019, it was still only a fraction of the massive amounts Beijing advanced to African countries in the early years of its Belt and Road Initiative, according to data compiled by the Boston University Global Development Policy Centre.

Cumulative commitments between 2013 and 2018 surpassed US$10 billion annually, the centre’s updated “Chinese Loans to Africa Database” shows.

The loans last year went to eight African countries: Angola, Burkina Faso, Ivory Coast, Egypt, Eritrea, Madagascar, Nigeria and Uganda.

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What does it mean for the world when Chinese consumers tighten their belts?

Chinese lenders also channelled financing to Africa via multilateral platforms such as the African Export-Import Bank and the Africa Finance Corporation, mainly for small and medium-sized enterprises and trade finance-related purposes.