Chinese development banks have provided $23 billion in financing for infrastructure projects in sub-Saharan Africa from 2007 to 2020, more than double the amount lent by these banks to the United States, Germany, Japan and France together, according to a new study.
The Center for Global Development think tank said a review of 535 public-private infrastructure deals funded in the region over those years showed that China’s investments were dwarfed by those of other governments and multilateral development banks.
Nancy Lee, lead author of the paper and senior policy researcher at the center, said overall public funding for projects in sub-Saharan Africa remains stuck at around $9 billion, well below the region’s needs for roads, dams and bridges. .
“There’s a lot of criticism of China,” she said. “But if Western governments want to increase productive and sustainable investments to meaningful levels, they must deploy their own development banks and pressure multilateral development banks to make such investments a priority.”
Between 2007 and 2020, China Exim Bank and China Development Bank provided $23 billion in financing, while all other major development finance institutions together provided $9.1 billion, according to the report.
He noted that the main U.S. development finance agency, now known as the U.S. International Development Finance Corp, lent just $1.9 billion for infrastructure in the region during that period, less than one-tenth of what China provided.
Multilateral development banks like the World Bank provided just $1.4 billion per year on average for public-private infrastructure projects in sub-Saharan Africa from 2016 to 2020, according to the report.
China’s lending to Africa has come under scrutiny in recent years over a lack of transparency and its use of secured lending, with economists from the International Monetary Fund and World Bank warning that Many low-income countries are facing or already in a situation of debt distress.
But Western countries have been slow to increase investment despite “a lot of rhetoric”, Lee said.
The administration of US President Joe Biden unveiled a new push in July to expand business ties between US companies and Africa, with a focus on clean energy, health, agribusiness and transport infrastructure. But its ongoing review of trade policies has left the private sector reluctant to commit funds.
A senior US trade official said last week that Washington had engaged in robust talks with Kenya as part of its drive to increase trade investment in the African continent and would have more to say in the coming weeks.