Why did China’s Belt and Road Initiative funding in sub-Saharan Africa fall to historical low last year?
- Report says financing and investment dropped 54 per cent last year to US$7.5 billion
- New risk evaluations led to less financial engagement in some African countries
In the past two decades, China led a financing boom for big infrastructure projects in Africa ranging from ports and hydroelectric dams to highways and airports. But belt and road funding in sub-Saharan Africa dropped 54 per cent last year, to US$7.5 billion from US$16.5 billion in 2021, according to a recent report by the Green Finance and Development Centre, which is part of the Fanhai International School of Finance at Fudan University in Shanghai.
The report said sub-Saharan Africa attracted US$4.5 billion for construction last year, compared with US$8.1 billion in 2021. No new Chinese funding for African railway projects was announced last year, but non-Chinese contractors secured some large deals, including a US$8.7 billion project in Egypt won by German conglomerate Siemens in May.
01:25
China-funded infrastructure across Africa force difficult decisions for its leaders
Chinese investment, mostly by private companies, in belt and road projects in sub-Saharan Africa dropped to US$3 billion last year from US$8.5 billion in 2021, the report said.
The centre’s director, Christoph Nedopil Wang, said China’s financial engagement in some African countries had declined during the Covid-19 pandemic amid new risk evaluations.
Wang said much of China’s financing and investment in Africa had been in the extraction of natural resources and the building of large infrastructure projects, with large investment volumes supported by bank loans.