China’s financial ties with Africa shift as lending drops
China’s financial engagement with Africa has changed significantly, according to a recent report by ONE Data for the Development Finance Observatory. The country has moved from being a major lender to Africa to now extracting more funds from the continent. This shift has impacted infrastructure projects and public finances across Africa. Multilateral lenders have increased their support as China’s role has diminished.
What we know
- China went from providing $48 billion in net finance to Africa a decade ago to extracting $24 billion now.
- Multilateral lenders now provide 56% of net flows, totaling $378.7 billion between 2020-2024.
- Chinese loans previously funded major infrastructure projects like roads, railways, and power plants in Africa.
- China has reduced overseas lending due to rising debt risks and slower domestic growth.
- Public and publicly guaranteed long-term external debt from private sources fell sharply, dropping from $115 billion in net new resources (2010-2014) to $7.3 billion in the last five years.
