Over the past two decades, China’s financial ties with several African nations have seen notable growth, presenting both opportunities and challenges.
- Angola
Following the resolution of its civil war in 2002, Angola focused on reconstruction efforts, with China playing a pivotal role through over 100 projects primarily financed by oil-backed loans. This strategic partnership resulted in a substantial debt of $42,619 million (KSh 5.7 trillion) owed by Angola to China as of 2023.
- Ethiopia
By March 2023, Ethiopia’s foreign debt had reached $28.2 billion (KSh 3.8 trillion), with nearly half of this amount, $13.7 billion (KSh 1.84 trillion), attributed to China, underscoring the country’s significant financial reliance on Chinese funding.
- Zambia
China stands as Zambia’s largest creditor, with approximately one-third of its external debt amounting to an estimated KSh 1.33 trillion owed to China, highlighting the depth of their economic interconnectedness.
- Kenya
The impact of Chinese loans is heavily felt in Kenya, especially with major infrastructural projects like the Standard Gauge Railway (SGR). Kenya’s debt to China exceeds KSh 1.2 trillion. Kenya plans to raise $500 million through a debut bond sale in China as it seeks to widen its funding pool from foreign sources to address the upcoming budget deficit.
- Cameroon
Joining the ranks of countries relying on Chinese funding, Cameroon’s debt to China stands at a significant KSh 837 billion, showcasing the widespread nature of China’s financial influence in Africa.
- Sudan
During the 2000s, Sudan received substantial loans and investments from China to bolster its oil production and economic development, resulting in an outstanding debt of $5.12 billion (KSh 832.8 billion) as of March 2023.
- Democratic Republic of Congo (DRC)
The DRC’s borrowing from China for various projects between 2000 and 2018 amounted to $2.4 billion, with the current debt exceeding KSh 727.7 billion, reflecting China’s role in financing key sectors like mining, transportation, and electricity.
- Nigeria
Although China remains Nigeria’s largest bilateral creditor, accounting for $5.16 billion (KSh 696.6 billion) of its total $68 billion public debt, the proportionate share underscores a relatively lower impact compared to other African nations, signaling a complex financial landscape.
In conclusion, while Chinese investment has been pivotal for African development, managing debt sustainably remains a critical challenge for these nations, necessitating careful fiscal strategies and diversified funding sources.
