China slashes African infrastructure loans but ICT funding holds firm

Data shows 11 deals worth US$1.9 billion were signed in eight countries in 2020, a 78 per cent drop on the previous year

Analysts say effects of Covid-19 on African economies and a worldwide pullback of China’s lending could explain the shortfall

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The August 2021 opening of Zambia’s international airport, funded by China. Chinese lenders have slashed new commitments to African transport projects and other sectors. Photo: Xinhua

Published: 11:00am, 27 Apr 2022

Chinese lending to Africa fell by 78 per cent to its lowest level in more than a decade in 2020, with just 11 deals signed worth US$1.9 billion – partly because of the Covid-19 pandemic.

According to the Chinese loans to Africa database, managed by the Boston University Global Development Policy Centre, this compares with 33 loan agreements worth US$8.3 billion in 2019.

The 2020 agreements included transport, power, ICT and banking sector projects in eight countries – Burkina Faso, Democratic Republic of Congo, Ghana, Lesotho, Madagascar, Mozambique, Rwanda and Uganda, the centre’s researchers said in a study released on Monday.

China Eximbank financed eight of the projects, with the remainder going to Bank of China, Industrial and Commercial Bank of China and Dongfang Electric International Corporation.

Notably absent from the list of lenders was China Development Bank, with no new loans in 2020, after its years of shrinking African investments in relative and absolute terms since 2016.

The regional African Export-Import Bank, based in Egypt, received US$200 million from the Bank of China to support the recently launched pandemic relief fund.