China's lending to Africa increases YoY for first time since 2016
(MENAFN) According to an independent study released on Thursday, Chinese financial institutions approved USD4.61 billion in loans to Africa last year, marking the first annual increase in Chinese lending to the continent since 2016. This uptick includes nearly USD1 billion in cash facilities extended to Egypt's central bank. The increase represents a significant recovery from the steep decline in lending experienced since the onset of the COVID-19 pandemic in 2020, when annual loan volumes from China had sharply decreased.
The study, conducted by the Center for Global Development Policy at Boston University, reveals that this new volume of lending is more than triple the amount recorded in 2022. This resurgence indicates China's renewed commitment to supporting African economies amid concerns over high debt levels. Notably, some of the largest loans granted last year include nearly USD1 billion from the China Development Bank for a railway project in Nigeria and a similarly sized loan to Egypt's central bank.
The data arrives just ahead of the Forum on China-Africa Cooperation, which Beijing will host next week, and underscores China's strategic shift towards financing renewable energy projects. Nearly 10% of the loans provided in 2023 were allocated to solar and hydropower projects, reflecting a pivot from traditional coal-fired power investments. China has recently become a leading source of bilateral loans for several African nations, including Ethiopia, highlighting its growing influence in the region's development landscape.
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