Chinese financing and investment in big African infrastructure projects under the Belt and Road Initiative fell to a historical low last year as China cut financing for some big-ticket projects due to debt concerns and shifted capital to other regions. China’s BRI funding in Sub-Saharan Africa decreases.
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.
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. China’s BRI funding in Sub-Saharan Africa decreases.
The report singled out Angola a key destination for Chinese capital in the past two decades which saw belt and road project funding drop from US$310 million in 2021 to zero last year, tracking an Africa-wide trend that started about five years ago as Chinese policy lenders such as the Export-Import Bank of China grew more cautious. Angola was among 14 countries that recorded a 100 per cent drop in belt and road project funding last year, with the others including Nepal, Peru, Russia and Sri Lanka.
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.
