China's Renewed Financial Commitment to Africa: A Boon or Bane?

Chinese lenders approved $4.61 billion in loans to Africa in 2023, marking the first increase since 2016. This shift aims to curb risks with indebted economies. The study highlights China's changing lending strategy, including significant loans to Nigeria and Egypt for infrastructure, energy, and ICT projects.

Chinese lenders approved $4.61 billion in loans to Africa last year, marking the first increase since 2016, according to an independent study released on Thursday.

Africa had been securing more than $10 billion annually in loans from China between 2012-2018 through President Xi Jinping's Belt and Road Initiative (BRI). However, lending fell sharply from the start of the COVID-19 pandemic in 2020. Last year's more than three-fold increase from 2022 indicates China's effort to mitigate risks associated with highly indebted economies, the Boston University's Global Development Policy Centre study found.

"Beijing appears to be seeking a sustainable lending equilibrium and experimenting with new strategies," said the university center, which runs the Chinese Loans to Africa Database project. Major loans last year included a nearly $1 billion loan from China Development Bank to Nigeria for the Kaduna-to-Kano Railway and a similar facility to Egypt's central bank.

(With inputs from agencies.)