Investment
China has Invested More in Africa than the Other Top Eight Lenders Combined By Tim McDonnell
China lends billions of dollars more to infrastructure projects in Africa than any other country or international bank. REUTERS/NOOR KHAMIS
CHINA, IN ADDITION to being Africa’s biggest trading partner, is building the future of the continent’s urban landscapes almost singlehandedly. And in spite of rhetoric from US president Joe Biden and other leaders from wealthy countries on the urgent need to improve infrastructure on the continent, investment from those countries and international development banks has stagnated at levels far below what is needed. Between 2007 and 2020, China’s two main overseas development banks invested $23 billion in infrastructure projects on the continent, according to a Feb. 9 analysis by the Center for Global Development, a US think tank. That’s $8 billion more than what the other top eight lenders combined, including the World Bank, African Development Bank, and US and European development banks, contributed. During that period, total lending from all parties has leveled off at about $9 billion per year, less than one-tenth (pdf) of what the continent likely needs to support its growing population and meet urgent health, development, and energy challenges. In some cases, Chinese infrastructure lending
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has been a risk for African countries, with projects blamed for being sloppily executed, prioritizing the interests of politicians and exporters over local communities, not employing local workers, and piling up unsustainable debt burdens. But on the whole, the CGD report argues, Chinese infrastructure investment has been a net benefit to African economies and sets a bar that the US and other lenders should aspire to.
Renewable energy projects attract the most development funding in Africa The report also finds that between all public lenders, renewable energy projects have attracted more investment than other sectors, including fossil fuels. That may be a good thing for the global climate, but with more than half of people on the continent still lacking access to electricity, some economists argue that far more investment is needed in grid infrastructure and, in some cases, natural gasfired power plants. https://qz.com/africa/2125769/china-hasinvested-23-billion-in-africas-infrastructure
DAWN
www.africabusinessassociation.org
