‘Blind dumping over’: Chinese lenders in Africa focus on stronger economies
‘Blind dumping over’: Chinese lenders in Africa focus on stronger economies
- Lending to African countries that have not sought debt relief from China rose in 2019, says American research institute
- Drop in lending temporary, say researchers, because ‘Chinese banks are interested in the profits available in emerging and frontier markets’
dropped by nearly 30 per cent in 2019 after Chinese financiers stopped “blindly dumping” loans into African countries with debt distress, a new study shows.
The study conducted by the China-Africa Research Initiative (CARI) at Johns Hopkins University found that China’s loans to the continent amounted to US$7 billion in 2019, down from US$9.9 billion a year earlier.
China cut lending to historically large borrowers that had negotiated debt relief with China, such as Angola and Ethiopia. But lending to countries that had not sought debt relief, including Ghana, Nigeria, Egypt and South Africa, rose in 2019, according to the study.
CARI said Chinese lenders were now shifting their focus to borrowers with strong economies and debt management after some countries into which Beijing had pumped billions of dollars for mega infrastructure projects fell into debt distress.
