URBANIZATION AND INDUSTRIALIZATION

Box 1.4 CHINA’S ENGAGEMENT IN AFRICA: ANY IMPACT ON AFRICA’S GROWTH?
Africa’s growth has shown a positive correlation
coefficient of 0.3 with China’s growth since 2000
(box figure 1.2). The decline in growth in China and
weak growth in many emerging economies have
contributed to the slowdown in global growth, with
effects on Africa.
Box Figure 1.2 Correlation between real GDP growth in Africa and China, 2000–2014
7
Correlation 0.301
AFRICA'S REAL GDP GROWTH
6
5
4
3
8 10 12 14
China's real GDP Growth
Africa real GDP growth
Fitted values
Source: Based on data from World Bank (2016b).
The Chinese slowdown has affected African economies
mainly through the trade and finance channels (the
latter includes aid, grants, loans and investment).
China’s imports from Africa soared from $5.5 billion in
2000 to about $67 billion in 2010, and to $116 billion
in 2013, before falling sharply to $68 billion in 2015.
Similarly, Chinese loans to African countries surged
from $0.13 billion in 2000 to $17 billion in 2013 before
receding to $13.6 billion in 2014. Investment from
China in Africa jumped from almost zero in 2000 to
$3.1 billion in 2014.
Awel and Chavula (2016) estimated growth spillover
effects from China to Africa for 1992–2014 and find
a direct correlation between Chinese and African
growth. They also highlighted that the strongest
growth channels are Chinese imports from Africa and
Chinese investment in Africa.
Falling demand from China as it rebalances from an
investment-led to a consumption-based economy
is taking a toll on African growth. For this among
many other reasons, African economies need to
diversify their trade, build capacity and integrate their
economies into global value chains for value-added
products.
RECENT ECONOMIC DEVELOPMENTS IN AFRICA
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