China, which is the world’s largest single country creditor^[1], remains one of the largest bilateral lenders to African countries. Between 2000 and 2019, it is estimated that African governments, through their state owned enterprises, and Chinese financiers signed over a thousand loan commitments worth US$153 billion^[2]. Chinese lenders in Africa include the China Exim bank, China Development Bank (CDB), the Suppliers’ Credits from Chinese Firms, Industrial and Commercial Bank of China (ICBC) and Chinese commercial banks. Chinese creditors mainly offer commercially oriented loans. In East Africa, the China Export and Import bank is the major Chinese financier, having provided US$ 13,541 million which represents 93% of the loans as compared to other Chinese Creditors. China Development Bank has provided US$ 1,054 million (7%), while Suppliers’ Credits from Chinese firms have provided US$ 30 million (0.21%) of the loans.

Figure 1: Loans received from China to East Africa by type of Financier

The Eastern Africa region has received loans amounting to US$ 47,586 million from China between 2000- 2019. This large amount is attributed to the Belt Road Initiative (BRI) projects in the region which are aimed at increasing the connectivity of Asia, Europe and Africa. The main sectors funded by the loans have been the Transport, Power and Communication sectors each receiving 48%, 31% and 6% respectively. The loans have been used to finance projects such as building roads and railway tracks and installing electrical grid lines among others. Examples of some of such projects in the region include: (i) Mombasa-Nairobi Standard Gauge Railway and Nairobi Expressway in Kenya; (ii) Kampala–Entebbe Expressway, Karuma Hydroelectric Dam, Isimba Hydroelectric Dam and Standard Gauge Railway from Kampala to Malaba in Uganda; (iii) Nyabarongo II hydropower plant in Rwanda; and (iv) Bagamoyo Port in Tanzania.

Figure 2: Sectoral distribution of loans from China to East Africa

[1] https://pubdocs.worldbank.org/en/247471617652072581/Debt-Report-2021-Edition-II.pdf

[2] https://chinaafricaloandata.bu.edu/