africa

Yale Center for the Study of Globalization
billion in 2012. Due to the rapid increase in loan funds, annual disbursements are
notably smaller than annual commitments. And, as noted above, official development
assistance remains a small portion of the total flows. In 2005, the portfolio of
concessional foreign aid loans at China Eximbank made up only 3 percent of the
Eximbank’s assets, according to a credit review by Standard & Poor’s.
Chinese leaders have pledged to commit official loan finance of US$35 billion
between 2007 and 2015 to Africa 5 , or nearly US$4 billion per year. Up to half of
this is likely to be non-concessional. China Eximbank also provides export buyers’
credits and commercial loans tied to market rates. China Development Bank (CDB),
which provides only commercial-rate loans, began lending in Africa around 2007. In
2009, CDB also established a loan fund for African small and medium enterprises;
by the end of 2012, this fund had committed US$1.21 billion in SME loans through
African financial institutions. People’s Daily reported that as of September 2010,
CDB had committed more than US$10 billion to projects in Africa and disbursed
US$5.6 billion to 35 projects in more than 30 African countries 6 ; this figure is likely
to include finance to Chinese companies operating in Africa. In 2012, CDB was
reported to have US$13.7 billion in outstanding loans in Africa. 7
Drawing on open sources, project by project, the SAIS China Africa Research
Initiative (CARI) estimates that Chinese official loan commitments and suppliers’
credits to African governments, African state-owned enterprises (SOEs), and joint
ventures between African SOEs and Chinese firms were approximately US$49 billion
between 2000 and 2011. 8 These figures include finance for military as well as
economic purposes. Nearly half of the value of these credit agreements was secured
with commodity export sales or enterprise profits going to an escrow account. The
largest Chinese loans are at commercial rates of LIBOR plus a margin, and are
generally tied to Chinese goods and services, although this is somewhat negotiable.
These figures have grown sharply but appear to have leveled off. Recent years (up
to 2011) show approximately US$8.4 billion annually in commitments of bilateral
loan finance to African governments, government-owned banks, SOEs, and joint
ventures from all Chinese sources.
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