China committed 360 billion yuan ($50.7 billion) in credit lines and investments over three years, falling short of the debt relief many African nations had hoped for.
The Forum for China-Africa Cooperation (FOCAC), launched in 2000 and bolstered by President Xi Jinping’s Belt and Road Initiative (BRI), remains a key platform for China, the world’s largest bilateral lender to Africa.
According to Hasnain Malik from Tellimer, China is regaining its momentum in emerging markets, although still below pre-COVID levels. FOCAC also plays a role in China’s strategy to compete with global powers such as the U.S., EU, and Japan in Africa.
At a gathering in Beijing’s Great Hall of the People, diplomats and officials from over 50 African nations assembled for a group photo alongside Chinese leaders, including President Xi Jinping.
China’s latest financial commitment surpasses its 2021 pledge but remains below the $60 billion offered in 2015 and 2018, which marked the height of its investments in Africa under the Belt and Road Initiative.
During those peak years, China financed major infrastructure projects, including roads and railways, but funding has significantly slowed since 2019, leaving many projects unfinished.
The newly pledged funds will target 30 infrastructure initiatives aimed at boosting trade, though details were not provided.
Africa, a continent of over 1 billion people, faces an annual infrastructure funding gap of $100 billion, which is crucial to realising the African Continental Free Trade Area (AfCFTA).
China has scaled back on major infrastructure financing, focusing instead on smaller projects due to domestic economic pressures and rising debt risks among African nations.
When questioned about the shift, Chinese Foreign Ministry spokesperson Mao Ning explained that China and African countries jointly decide on project specifics, suggesting there is no inconsistency with China’s cautious lending approach.
Currency Exchanges
China has pledged to launch 30 clean energy initiatives in Africa and expand cooperation on nuclear technology to address the continent’s power shortage, which has hindered industrial growth.
“The outcomes of the FOCAC summit signal an impetus for green projects and especially for renewable energy installations,” declared Goolam Ballim of South Africa’s Standard Bank, highlighting China’s dominance in wind and solar energy sectors.
However, some analysts remain skeptical. “The issue isn’t the size of the investments but the lack of transparency around the terms of the debt,” said Trang Nguyen of BNP Paribas.
China made no explicit offers of debt relief but urged creditors to share the burden of African debt restructuring.
Despite the subdued expectations, African leaders made some progress. Ethiopia and Mauritius secured new currency exchange agreements with China’s central bank, while Kenya reported advancements in its efforts to secure funding for key projects.
On the diplomatic front, China reaffirmed its commitment to Africa’s security and humanitarian issues, with Tanzanian President Samia Suluhu noting that “China-Africa relations are at their best in history”.
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