There was a time when most African governments saw China as an alternative to cheap, condition-free lending, and China took advantage to position itself as a lender of choice as African countries trooped to China for loans they couldn’t obtain from traditional Western lenders.
Data collected and processed by the School of Advanced International Studies, China Africa Research Initiative (SAIS-CARI) at the Boston University Global Development Policy Centre shows that in 19 years, Chinese lending to African countries has amounted to $153 billion.
SAIS-CARI estimated that between 2000 and 2019, Chinese financiers signed 1,141 loan commitments worth $153 billion with African governments and their state-owned enterprises. It clarifies however, that the figures are not equivalent to African government debt, as the database does not track disbursement or repayment.
To put this in some context while Africa exported $6 billion worth of raw coffee in 2014, after processing, branding and packaging the final product sold abroad for $100 billion.
It is the same with cocoa. While Africa produces about 75 per cent of the world’s cocoa, the continent only gets 2 per cent of the $100 billion revenue from the chocolate industry.
China has however cut down on its lending to African countries. According to the new data published by SAIS-CARI, in 2019, lending dropped 30 per cent to $7 billion, down from $9.9 billion in 2018.
The database includes all mainland Chinese loans to Africa, which may come from a variety of sources, including: Chinese Ministry of Commerce (MOFCOM); The two Chinese policy banks— Export-Import Bank of China (Eximbank) and China Development Bank (CDB); Chinese private/commercial banks—Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Bank of China (BoC), China CITIC, Agricultural Bank of China (ABC), China Merchant Bank (CMB), etc.; Chinese state-owned enterprises (SOEs) or private businesses providing suppliers credits or investment loan financing; People’s Bank of China – the central bank of China, who is a relatively new lender in Africa comparing to the Chinese policy banks, the researchers indicated.
The Boston University Global Development Policy Center has been managing the Africa Database as of March 29, 2021.
By Emmanuel K. Dogbevi
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