China, in addition to being Africa’s largest trading partner, is almost single-handedly building the future of the continent’s cityscapes. And despite rhetoric from US President Joe Biden and other wealthy country leaders about the urgent need to improve infrastructure on the continent, investment from these countries and international development banks has stagnated at levels far below this which is necessary.
Between 2007 and 2020, China’s two major overseas development banks invested $23 billion in infrastructure projects on the mainland, according to a February 9 analysis by the Center for Global Development, a US think tank. That’s $8 billion more than the other eight major lenders combined, including the World Bank, African Development Bank, and US and European development banks, have contributed.
During this period, total lending from all parties has stabilized at around $9 billion a year, less than a tenth (pdf) of what the continent is likely to need to support its growing population and addressing pressing health, development and energy challenges.
In some cases, Chinese infrastructure loans have posed a risk to African countries, with projects accused of being carelessly executed, prioritizing the interests of politicians and exporters over local communities, failing to employing local workers and accumulating an unsustainable debt burden. But overall, according to the CGD report, Chinese infrastructure investments have been a net benefit to African economies and set a bar for the United States and other lenders to aspire to.
Renewable energy projects attract the most development finance in Africa
The report also finds that among all public lenders, renewable energy projects 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 the continent’s people still without access to electricity, some economists say much greater investment is needed in power infrastructure grid and, in some cases, in natural gas electricity.
Credit: The Bharat Express News