Chinese development lending to Africa dropped significantly in 2024, falling to 2.1 billion US dollars, according to newly released data from Boston University’s Global Development Policy Center. This figure marks a nearly fifty percent decline from the previous year and represents the lowest annual lending level since the peak of the COVID 19 pandemic.
At its highest point in 2016, Chinese lending to Africa reached 28.8 billion US dollars. This era was characterised by large-scale infrastructure investments in roads, railways, and energy systems under the Belt and Road Initiative. However, the latest data signals a deliberate pivot by Beijing from high-value megaprojects towards smaller, commercially viable undertakings. Notably, these new financial arrangements are increasingly denominated in Chinese yuan rather than US dollars.
The evolving nature of China’s engagement with the African continent appears to reflect a dual aim: to mitigate financial risk in the wake of sovereign debt challenges and to recalibrate its international development model. The stress brought on by the pandemic resulted in several African nations defaulting on Chinese loans, including Zambia, Ghana and Ethiopia. These defaults have seemingly prompted a reassessment of lending practices by Chinese policy banks and state-affiliated institutions.
The Chinese Loans to Africa Database maintained by Boston University shows a marked shift away from the billion dollar infrastructure deals that previously defined the partnership. Between 2012 and 2018, annual lending from China to Africa consistently exceeded ten billion dollars. That trend has now reversed as China repositions itself within the continent’s financial landscape.
According to the data, the six projects funded by Chinese institutions in Africa during 2024 were located in Angola, Kenya, Egypt, the Democratic Republic of Congo and Senegal. Angola emerged as the continent’s top recipient, securing 1.45 billion US dollars for upgrades to its power grid and roads. This reflects a continued emphasis on strategic bilateral relationships with countries that have longstanding ties with Beijing.
One of the most significant developments in 2024 was the broader adoption of yuan-denominated lending. All Chinese infrastructure loans to Kenya during the year were issued in yuan. In October, Kenya announced the conversion of 3.5 billion US dollars of outstanding Chinese debt into yuan. Ethiopia is reportedly considering a similar move. Additionally, the China Development Bank and the Development Bank of Southern Africa entered into a financing cooperation agreement to expand yuan-denominated investments, further institutionalising this currency shift.
The shift towards local currency lending, complemented by foreign direct investment and on-lending to small and medium sized enterprises through African domestic banks, signals a broader transition in China’s financial approach. Instead of state-backed megaprojects, the emphasis is now placed on projects that are market-driven and aligned with commercial returns.
This changing model also reflects a more cautious stance by Chinese institutions, who are now more focused on sustainability, debt risk management, and partnerships that foster economic resilience. Rather than abandoning the African continent, China appears to be evolving its engagement, employing diversified financial instruments that offer lower-cost solutions and strengthen local institutions.
For African nations, this evolution could provide new opportunities for financial sovereignty and a more balanced relationship. By working through regional banks and accepting yuan-based financing, there is potential to reduce exposure to volatile external debt markets. However, this transition also raises important questions about the long term impacts of currency dependence and the broader geopolitical shifts in development finance.
While China’s role in Africa continues to draw scrutiny and divergent interpretations, the current trajectory reflects neither retreat nor dominance. Rather, it suggests a recalibration that could reshape South South cooperation. As African countries navigate this changing environment, there remains an opportunity to assert agency in shaping partnerships that are grounded in mutual benefit, transparency and sustainable development goals.By
