JOHANNESBURG, Sept 19 (Reuters) – China’s government lending to Africa fell below $1 billion last year, the lowest level in nearly 20 years, as Beijing’s government borrows from decades of massive infrastructure development on the continent. Data was revealed on Tuesday that confirms the change in direction.
The decline in lending, reflected in data from Boston University’s Global China Initiative, comes as several African countries struggle with debt crises and China’s own economy faces increasing headwinds.
Africa is part of President Xi Jinping’s ambitious Belt and Road Initiative, launched in 2013 with the aim of recreating the ancient Silk Road and expanding China’s geopolitical and economic influence by promoting global infrastructure development. This is the focus of the BRI Initiative (BRI).
Boston University’s China-Africa Lending Database estimates that Chinese lenders provided $170 billion to Africa from 2000 to 2022.
However, lending has declined significantly since its peak in 2016. Only seven loans were signed in 2021, worth a total of $1.22 billion. Nine loans totaling $994 million were agreed last year, the lowest level of Chinese lending since 2004.
The last two years have coincided with the coronavirus pandemic, but researcher Ointarelado Moses told Reuters there were other factors at play.
“A lot of it really has to do with the level of risk exposure,” said Moses, who manages the database and co-authored the report released Tuesday.
African governments have generally welcomed Chinese loans and infrastructure projects, but Western critics have accused Beijing of burdening poor countries with unsustainable debt.
Zambia, a major Chinese borrower, became the first African country to default on its debt amid the coronavirus pandemic at the end of 2020. Other governments, including Ghana, Kenya and Ethiopia, are in similar troubles.
Meanwhile, China faces its own problems at home as policymakers struggle to revive growth amid a sustained slump in its key real estate industry, a weak currency and weak global demand for its products. are doing.
“China’s domestic economy plays a big role here,” Moses said.
![reuter graphics](https://graphics.reuters.com/CHINA-AFRICA/gkvlxloejvb/chart.png)
![reuter graphics](https://graphics.reuters.com/CHINA-AFRICA/gkvlxloejvb/chart.png)
China Development Bank and Export-Import Bank of China, two institutions that support the bulk of lending to Africa, will be redeployed to support the domestic economy, while much of the remaining foreign lending will be channeled to markets closer to home. is directed towards.
However, declining lending does not necessarily mean the end of China’s involvement in Africa.
A Boston University analysis finds that more than $500 million in loans have declined, and a particular trend toward a focus on social and environmental impact reflects China’s stated commitment to a higher-quality, greener Belt and Road Initiative. It was found that this appears to reflect a strong promotion.
“This is a very big part of the relationship, and there will continue to be interest from Chinese financiers,” Moses said. “It just looks different.”
Editing: Tomasz Janowski
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