China ramps up lending to African nations

China's financial relationship with Africa has experienced a significant shift in 2023, with Chinese financial institutions dramatically increasing their loans to African countries.

After several years of declining investments, China has tripled its lending from the previous year, marking a notable departure from its recent cautious approach, Caliber.Az reports via foreign media.

This resurgence in Chinese loans is highlighted in a new report by Boston University's Center for Global Development Policy, which reveals that while China's lending practices have become more selective, its financial engagement in Africa remains substantial.

In 2023, Chinese financial institutions, including banks, state-owned organizations, and companies, extended $4.61 billion in loans to African countries. Notably, this marks the first increase in Chinese lending to Africa since 2016.

Over the past 23 years, China has provided a total of 1,306 loans to African nations, amounting to $182.3 billion. However, the report highlights that Beijing has recently become more selective in its lending practices.

During the initial years of Xi Jinping's Road and Belt initiative (2012 to 2018), Chinese financial institutions were lending $10 billion or more annually to African countries. However, with the advent of the COVID-19 pandemic, the volume of loans declined significantly.

Currently, China is more inclined to extend loans to governments that are deemed likely to repay, rather than investing in the private sector.