New data shows Chinese lending to Africa dropped 30% in 2019 at $7 billion, down from $9.9 billion in 2018.
This data is collected as part of the Chinese Loans to Africa Database and includes all loans from Chinese policy and commercial banks to African governments and state-owned enterprises in 2019.
Started by the China-Africa Research Initiative at Johns Hopkins University (SAIS-CARI) in 2007, the Chinese Loans to Africa Database will now be managed by the Boston University Global Development Policy Center, which will produce all future updates.
Main Findings:
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Down, but not out: In 2019, China provided loan commitments of $7 billion, down 30% from 2018. China’s loan commitments (2000-2019) in Africa now total $153 billion.
- Top borrowers: In 2019, China’s top borrowers were Ghana, South Africa, Egypt, Côte d’Ivoire and Nigeria.
China’s Top 5 African Borrowers in 2019 vs. China’s Top 5 Borrowers 2010-2018:
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Avoiding risk: Countries where China reprofiled, restructured, or refinanced existing debt between 2015-2019, including Angola, Cameroon, Djibouti, Ethiopia, Mozambique, and Republic of Congo, received far less Chinese finance in subsequent years.
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Changing creditors: The 2019 data includes over 30 Chinese banks and other lenders. Lending from Export-Import Bank of China, China’s only source of concessional loans and preferential export credits, peaked in 2013. Commercial loans from the China Development Bank and other banks have since filled the gap.
Annual Loan Commitments to Africa* from China’s Big Four Overseas Lending Banks 2010-2019, 3 Year Rolling Average
BOC=Bank of China; ICBC = Industrial and Commercial Bank of China; CDB = China Development Bank; Eximbank = Export-Import Bank of China
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Project size remains large: Since 2010, Chinese financiers have financed an average of 71 projects per year, at an average value of $180 million:
Number of Chinese Projects Signed per year vs. Average Project Size per year
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Resource-backed finance is evolving: Although accounting for only 8% of total Chinese lending to Africa (aside from Angola), the controversial resource-backed infrastructure financing model is not dead; it lives on in Ghana and Guinea.
However, the researchers do not predict a sustained drop in Chinese lending to Africa beyond COVID-19, as the demand for infrastructure in Africa will remain high, and Chinese banks will continue to be interested in the profits available in emerging and frontier markets.
Dig deeper:
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Explore the data in the Chinese Loans to Africa Database
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Read the joint briefing paper from SAIS-CARI and the GDP Center
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Register to attend the webinar discussion, tomorrow, Mar. 30, 9 AM EDT
African Eye Report