China’s recent financial pledge to Africa fell short of debt relief hopes. This week, China announced 360 billion yuan ($50.7 billion) in credit lines and investments over three years.
“China is moving back on to the front foot in terms of overseas deployment,” said Hasnain Malik of Tellimer. However, he noted that capital flows aren’t yet at pre-COVID levels.
The Forum for China-Africa Cooperation (FOCAC) was founded in 2000. Its role expanded with President Xi Jinping’s Belt and Road Initiative (BRI) in 2013. The BRI aims to recreate the ancient Silk Road, strengthening China’s global economic reach.
In Beijing, leaders from over 50 African nations met Chinese officials in the Great Hall of the People. The new pledge exceeds the 2021 commitment but is less than the $60 billion offered in 2015 and 2018.
During those peak years, China funded infrastructure projects like roads and railways. Since 2019, funding has dried up, leaving many projects stalled. The new funds will target 30 infrastructure projects but details remain scarce.
Africa faces a $100 billion annual infrastructure funding deficit. This hampers the development of the African Continental Free Trade Area (AfCFTA). Beijing’s focus has shifted to “small and beautiful” projects due to domestic economic pressures and rising debt risks in Africa.
Foreign ministry spokesperson Mao Ning stated, “The cooperation between China and African countries is discussed and determined by both sides.” This suggests that specific project implementation is a joint decision.
China also announced 30 clean energy projects for Africa. They plan to cooperate on nuclear technology and address power deficits. “The outcomes of the FOCAC summit signal an impetus for green projects,” said Goolam Ballim of Standard Bank.
China leads in wind and solar energy, Ballim noted. However, some remain skeptical about transparency in debt terms. “The issue is not so much about the size of the investments,” said Trang Nguyen from BNP Paribas.
No specific debt relief was offered. Instead, China called on other creditors for “joint actions and fair burden-sharing.”
Ethiopia and Mauritius secured new currency swap lines with China’s central bank. Kenya advanced talks on key infrastructure projects. Tanzania’s President Samia Suluhu praised the progress, saying China-Africa relations are at their best in history.
