China’s Lending to Africa Surges Amid Strategic Shifts

Chinese lenders approved $4.61 billion in loans to Africa in 2023, marking the first increase since 2016. This surge is part of China's new risk mitigation strategy, focusing on regional and national lenders. The funds targeted various sectors, including renewable energy, while China still supports economically-challenged countries.

Chinese lenders approved loans worth $4.61 billion to Africa last year, signifying the first annual increase since 2016, an independent study revealed on Thursday. Between 2012 and 2018, Africa secured over $10 billion annually from China because of President Xi Jinping's Belt and Road Initiative (BRI), but lending sharply declined since the onset of the COVID-19 pandemic in 2020.

The 2023 figure, representing an over three-fold rise from 2022, reflects China’s effort to manage risks tied to highly indebted economies, according to a study by Boston University's Global Development Policy Centre. “Beijing seems to be seeking a more sustainable lending level and testing new strategies,” said the university centre, which manages the Chinese Loans to Africa Database project.

This data is released as Beijing readies to host African leaders for the Forum on China-Africa Cooperation next week. The study identified 13 loan agreements last year, involving eight African countries and two multilateral lenders. High-profile items include a nearly $1 billion loan to Nigeria for the Kaduna-to-Kano Railway and a similar liquidity facility for Egypt's central bank. China has emerged as the top bilateral lender for various African nations in recent years.

(With inputs from agencies.)