New data showed that Chinese lending to Africa fell sharply, reflecting a shift in focus towards strategic investments in the continent and a decline in risk appetite in financing infrastructure projects.
China's total lending in 2024 was $2.1 billion, down more than 90% compared to its peak in 2016, according to a report by Boston University's Center for Global Development Policy. Chinese loans to Africa also fell by nearly half in 2024 compared to the previous year.
This downward trend began when Chinese loans to Africa fell sharply by more than 60% to $6.8 billion in 2019, coinciding with the beginning of the COVID-19 pandemic.
A Boston University database showed that Chinese loans to Africa have hovered just above $2 billion since 2020, after reaching $10 billion or more between 2012 and 2018. The decline is due to increased conservatism on the part of Chinese lenders, as well as borrowing restrictions in Africa linked to the post-pandemic economic shock, debt restructuring efforts, and increased volatility in the international system, according to researcher Mingdi Yue at the Center for Global Development Policy at Boston University.
Yue told Semaphore:
“Chinese banks have been lending heavily over the past decade, but they have become more cautious because not every amount has been repaid.” She added that lenders are feeling “increasing pressure on their balance sheets and do not want many non-performing or non-paying loans.”
Chinese lending to Africa has declined by more than 90%.
