Across Africa, the signs of new infrastructure projects are hard to miss. Highways stretch across previously isolated regions, ports are being modernised, and new railway systems connect cities and countries with an efficiency that was unimaginable just two decades ago. Over the past twenty years, China has become a key partner in this infrastructure development through bilateral agreements, loans, and initiatives.
The Scale of Chinese Investment
Chinese involvement is visible from East Africa’s standard gauge railways to West Africa’s highways and energy projects. The Belt and Road Initiative (BRI), launched by China in 2013, intensified the momentum of infrastructure development in Africa. By promoting connectivity and cooperation between Asia, Europe, and Africa, the BRI aims to enhance trade and stimulate economic growth. The initiative has led to significant investments in railways, highways, ports, and energy projects across the continent.
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In countries like Ethiopia, Angola, and Kenya, entire cityscapes and industrial zones have been reshaped, often with Chinese financing and engineering expertise. Key projects include the Nairobi-Mombasa railway in Kenya, which has enhanced transportation efficiency, and the Addis Ababa-Djibouti Railway, which has facilitated trade between landlocked Ethiopia and the coast. The dual carriageway projects and the development of industrial parks have also shown a commitment towards integrating African economies into the global supply chain.
For many African governments, China has become an attractive partner. Chinese-funded projects are often delivered quickly, with fewer political conditions compared to traditional Western lenders.
China is also one of Africa’s largest trading partners, with trade reaching over $200 billion in 2021, and is one of the continent’s most significant sources of foreign investment. A major component of this relationship is the considerable lending provided by Chinese policy banks, such as the China Exim Bank and the China Development Bank. These banks have played a vital role in financing large infrastructure projects, which include roads, railways, energy production facilities, and digital infrastructure, addressing the continent’s pressing infrastructure deficits.
For instance, China’s commitment in 2007 amounted to $4.5 billion, and total financial flow from Chinese sources to Africa reportedly reached an astonishing $148 billion between 2000 and 2019, with infrastructure, energy, and mining projects at the forefront. This financial influx has been fundamental in addressing the infrastructural deficit estimated to be around $100 billion annually in Africa.
Between Opportunity and Oversight
However, as this partnership deepens, it also invites important questions about long-term sustainability, governance, and ownership. Many of the financing arrangements are structured as loans, which has led to growing debt burdens for some countries. Transparency around the terms of these deals is not always clear, and in some cases, this has sparked domestic debate and civil society pushback.
Over the past decade, China’s approach to financing in Africa has evolved significantly. Traditionally dominated by policy banks, a new trend has emerged with increased participation from commercial banks and private enterprises. The diversification of funding sources now includes state-owned commercial banks like the Industrial and Commercial Bank of China (ICBC) and large private companies such as Huawei, which intersect with public and private interests.
From 2015 to 2021, loans from non-policy bank commercial creditors amounted to approximately $55 billion, representing over one-third of the total Chinese lending in that period. This diversification is indicative of a shift towards more market-oriented financing, with parameters favouring profitability and faster approvals.
There are also questions about local impact. While infrastructure brings benefits, the extent to which local workers, businesses, and institutions are involved in or benefit from these projects varies widely. Critics argue that without stronger local participation, the long-term benefits may be limited.
While China’s infrastructure investment has brought positive economic implications, it has also contributed to land use transformations and environmental degradation. According to studies conducted by Springerlink, for over two decades, Chinese companies have strengthened ties with African nations through trade, investment, and finance. Chinese Foreign Direct Investment (FDI) to Africa rose from 74.8 million USD in 2003 to 4.2 billion USD in 2020. These studies have shown that Chinese development projects have led to significant shifts in land cover, transitioning areas from natural landscapes to artificial surfaces. The emphasis on constructing urban infrastructure has correspondingly contributed to urbanisation across the continent.
According to research conducted by the Journal of Environmental Management, as of 2019, China has considerably expanded its national nature reserves to a current total of 474, with 217 aiming to conserve forest ecosystems. These 474 nature reserves cover approximately 10% of the country and have been shown to be effective at protecting China’s highly diverse ecosystems and habitat types. They are utilising satellite observation and project tracking, illustrating that regions with Chinese-funded initiatives have undergone notable changes, including deforestation, habitat disruption, and displacement of communities. Critics argue that these projects often lack strict environmental safeguards, raising concerns over sustainability.
Conversely, proponents of China’s involvement argue that its non-interference policy provides African nations with more flexibility to prioritise development according to their own goals, allowing for tailored projects that align with national priorities.
China’s influence is reshaping Africa’s infrastructure landscape in profound ways. The combination of extensive financial resources coupled with strategic investments is facilitating significant developments across the continent.
Yet, the increased diversification of financing sources introduces both opportunities and challenges as African nations navigate the complexities of debt management, environmental sustainability, and socio-economic outcomes. As Africa strives for economic growth and infrastructural development, the long-term impacts of Chinese investments will continue to resonate, necessitating smart governance and collaboration among stakeholders to ensure a holistic approach that benefits both partners in this evolving dynamic.
