Data showed that Chinese sovereign lending to African countries fell below $1 billion over the past year, the lowest rate recorded in nearly two decades.
This decline reflects a change in Beijing’s strategy, as it moves away from massive investment in decades-long infrastructure projects on the African continent.
This decline in lending comes at a time when many African countries are facing major challenges related to debt crises, while China’s economy is experiencing difficult conditions that require greater flexibility.
Africa was the main hub of China’s ambitious Belt and Road Initiative launched in 2013, aiming to resurrect the ancient Silk Road and expand China’s geopolitical and economic influence globally and regionally through a global infrastructure development drive.
Boston University’s China Loans to Africa Database indicates that China provided nearly $170 billion in loans to Africa between 2000 and 2022.
However, lending has seen a sharp decline since its peak in 2016, with only seven loans worth $1.22 billion signed in 2021.
Last year, only nine loans with a total value of $994 million reached settlement, marking the lowest level for Chinese lending since 2004.
While the governments of African countries have largely welcomed China-backed infrastructure lending and projects, others from Western countries have criticized Beijing for placing heavy burdens on poor countries through unsustainable debt.
Zambia, which is one of China’s largest borrowers, was the first African country to default on its debt during the Covid-19 pandemic at the end of 2020, and other countries such as Ghana, Kenya and Ethiopia which recently joined BRICS , are facing similar financial difficulties.
At the same time, China faces internal challenges, especially with regard to reviving economic growth and addressing challenges in the real estate sector, in addition to weak global demand for its products.