China’s development banks provided US$23 billion in financing for infrastructure projects in sub-Saharan Africa from 2007 to 2020, more than double the amount lent by such banks in the US, Germany, Japan and France combined, a new study showed.
The Center for Global Development think tank said that a review of 535 public-private infrastructure deals funded in the region in those years showed that China’s investments dwarfed those of other governments and multilateral development banks.
Nancy Lee, lead author of the paper and a senior policy fellow at the center, said that overall public funding for projects in sub-Saharan Africa remained stuck at about US$9 billion, well short of what the region needs for roads, dams and bridges.
“There is a lot of criticism of China, but if Western governments want to boost productive and sustainable investments to meaningful levels, they need to deploy their own development banks and press the multilateral development banks to make these investments a priority,” Lee said.
From 2007 to 2020, China Exim Bank and China Development Bank provided US$23 billion in financing, while all other major development finance institutions combined provided US$9.1 billion, the report found.
It said that the main US development finance agency, now known as US International Development Finance Corp, lent US$1.9 billion for infrastructure in the region during that period, less than one-10th of what China provided.
Multilateral development banks such as the World Bank provided US$1.4 billion per year on average for public-private infrastructure projects in sub-Saharan Africa from 2016 to 2020, the report said.
China’s lending to Africa has come under heightened scrutiny in the past few years for lack of transparency and its use of collateralized loans, with economists at the IMF and World Bank warning that many low-income countries are facing or are already in debt distress.
However, Western countries have been slow to pump up investments, despite “much rhetoric,” Lee said.
The administration of US President Joe Biden in July last year unveiled a new push to expand business ties between US companies and Africa, with a focus on clean energy, health, agribusiness and transportation infrastructure.
However, its ongoing review of trade policies has left the private sector skittish about committing funds.
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