China’s financial pledge to Africa has fallen to 33%, the first decline in twelve years.
President Xi Jinping pledged $40 billion to the continent in the next three years,a 33% drop from the $60 billion committed in 2018. Prior to that, China had doubled its financial commitment to the continent every three years since 2006
The money will be evenly split among credit lines to African financial institutions, investment from Chinese firms, trade financing, and International Monetary Fund (IMF) special drawing rights.
The plan to cut cash flows comes in the wake of rising indebtedness by African countries, worsened by economic fallout emerging from the global COVID-19 pandemic. Countries such as Zambia have struggled to service external debt in recent years and became the first one to default on Eurobond.
A report by College of William & Mary in late September suggested that African countries received 42% of all Chinese official development assistance between 2000 and 2017.
Another status report on Kenya’s Public Debt presented to the Senate Committee on Finance and Budget by the Central Bank of Kenya (CBK) Governor Dr Patrick Njoroge on September 15th 2021 showed that China is the leading bilateral lender to Kenya, accounting for 67% of its external debt followed by Japan(14%), France(7%) with other countries accounting for 11%.
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