Twenty Years of Data on China’s Africa Lending

Summarizing 20 years of data, Kevin Acker and Deborah Brautigam discuss the changing landscape of Chinese lending to Africa in a new policy brief, jointly published with the China Africa Research Initiative at Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies (SAIS-CARI).

In the policy brief, Brautigam, SAIS-CARI Director, and Acker, SAIS-CARI Research Manager, also discuss the latest update to the Chinese Loans to Africa Database for 2019, highlighting shifts in borrowers, project sizes, and lenders. Brautigam and Acker also discuss the outsized case of Angola in Chinese lending to Africa.

Main findings:

• Down, but not out: In 2019, China provided loan commitments of $7 billion, down 30 percent 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.
• 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. 
• 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. 
• Project size remains large: Since 2010, Chinese financiers have financed an average of 71 projects per year, at an average value of $180 million:
• 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. 

Acker and Brautigam expect the dip in financing to continue through 2020, reflecting the impact of the COVID-19 pandemic and associated economic dislocation. However, they do not predict a sustained drop in Chinese lending to Africa beyond that, 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.

Started by SAIS-CARI in 2007, the Chinese Loans to Africa Database includes all loans from Chinese policy and commercial banks to African governments and state-owned enterprises. As of March 29, 2021, the Chinese Loans to Africa Database will be managed by the Boston University Global Development Policy Center.