, Zambia, Kenya and Cameroon, received relatively small loans, CARI found.
Angola, which has received the most loans from China (about 30 per cent of all loans that Chinese lenders advanced to Africa), has seen a sharp decline in Chinese loan finance in recent years. The country received an average US$1.5 billion in loans from Chinese lenders since 2010, including the massive US$19 billion in 2016. However, it received US$405 million in 2018 and only US$106 million in 2019.
Between 2010 and 2018, Zambia and Kenya received an average US$1 billion annually but in 2019 that amount from China dropped to only US$217 million and US$265 million respectively.
became the first African country in the Covid-19 era to default. In November 2020, it defaulted on a US$42.5 million repayment of one of its dollar-denominated Eurobonds.
“The data on Chinese lending to Africa from the past 10 years shows that Chinese financiers adapt to changing economic and political conditions in Africa as they learn from experiences with borrowers in debt distress and debt restructuring negotiations,” CARI said in the report.
“Rather than continuing to blindly dump finance into countries with debt issues, Chinese financiers have shifted away from these countries – albeit belatedly in some cases, such as Zambia – and towards borrowers with stronger economies and debt management.”
Brautigam said “Chinese banks are acting rationally”. She said it was already clear in 2018 that three of these countries were facing a high risk of debt distress and several had already approached the International Monetary Fund for a bailout.
“Kenya looked to be at more moderate risk in 2018, but Chinese banks would have known that the grace period for the first SGR [Standard Gauge Railway] loan package was expiring in 2018,” Brautigam said.
Instead, Ghana, South Africa, Egypt, Ivory Coast and Nigeria were the largest recipients of Chinese loan commitments in 2019. None of these countries had restructured debt with China since 2000, CARI found.
In Ghana, its US$1.25 billion includes loans signed out of two large lines of future resource-secured credit.
Further, Chinese lending to Egypt and South Africa started to increase in 2016 as China shifted to more commercial lending. Between 2010 and 2019, neither country had issues with debt sustainability.
In Egypt, China Exim Bank signed loan deals totalling US$1.2 billion for a light rail project connecting Cairo to Egypt’s New Administrative Capital.
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“Yet we do not predict a sustained drop in Chinese lending to Africa. Like other lenders, Chinese banks are interested in the profits available in emerging and frontier markets,” CARI said.
