China Cuts African Credit: Shift, Not Disengagement?

For years, China has built its strong presence in Africa through the provision of substantial credits, especially aimed at financing the construction of infrastructures such as ports, roads, railways, airports, dams, etc. China’s infrastructural “footprints” are visible almost everywhere, in the 54 countries of the continent.

In recent years, however, statistics have shown a progressive tendency of the Chinese government to reduce its loans in Africa: according to data recently published by Boston University’s Global Development Policy Center, for 2024 Beijing’s credits to African economies amounted to only 2.1 billion dollars; this is the historic minimum ever recorded, and 90% less than in 2016, when they reached a peak of around 28 billion dollars, also following the Belt and Road Initiative (a global connection strategy between China, the East, Africa and some European countries).

We must therefore ask ourselves whether the drastic decline in Chinese credits represents a new strategy of China’s progressive distancing from the African continent, or is the effect of various considerations.

Due to significant financial flows to Africa in the past, Chinese banks have been heavily implicated in the issue of runaway debt, which represents a major obstacle to the continent’s development. The progressive reduction of Chinese loans, which statistics place starting from 2020, is primarily due to Chinese concerns about “defaults” and the subsequent, laborious debt restructuring processes initiated by countries such as Zambia, Ghana, Ethiopia, Chad, which have caused a series of failures to collect accrued interest and economic losses, raising the alarm in Beijing’s financial and governmental circles.

An important role in the recent Chinese financial cautions has also been played by the long-term consequences of the Covid pandemic, by the awareness of the dysfunctions and unpredictability of the new “world disorder”, and by the frequent conflicts, coups d’état, terrorist attacks and various tensions, which continue to afflict the African continent, despite the prevailing narrative (including that of the Mattei Plan) tends to underestimate these critical issues.

In fact, it seems that the reduction of Chinese credits to Africa is accompanied by a lower exposure for Beijing in the construction of mega-infrastructure projects, characteristic instead of its past economic presence, and by a greater attention on more limited and less risky programs, linked to the growth of local communities, to professional training initiatives, or to targeted operations in the energy transition sector, and the transfer of technologies in the field of communication and information.

In 2024, China limited itself to financing six projects in countries considered safe such as Angola (1.45 billion), Kenya (228 million), Egypt (76 million), Senegal (85 million) and the Democratic Republic of Congo (240 million, despite political tensions, however concentrated in the Kivu region, to the north-east). It is curious that these states are also taken as a point of reference by Western economies and the EU, demonstrating the need, felt by all global players, for reliable and economically solid African interlocutors.

Another characteristic of the new Chinese credits is that they are denominated in renminbi (or yuan), i.e. Beijing’s currency, rather than in dollars, to keep interest rates lower for the benefit of African partners, to increase the relevance of that currency on international markets, and to not depend on dollar fluctuations, managed by Washington for its own commercial purposes.

Beijing’s new support for the African continent seems to indicate a change of attitude, certainly more selective and prudent than in the past, in order to reduce any repercussions due to the socio-political and financial crises and fragilities typical of African states, but which in no way preludes a disengagement.

These financial precautions must in fact be associated with the strong impulse found in parallel in import/export in recent years (with the record figure of 225 billion dollars of Chinese exports to the continent and 123 billion of imports in 2025), likely to increase further thanks to the promise of the Beijing authorities, made last June, to abolish customs tariffs with Africa, in total contrast to the tariff policy, so dear to Trump.