Chinese banks provided more loans to fund developmental projects in sub-Saharan Africa than some of the world’s greatest economies combined from 2007 to 2020, according to a new study.
The Washington- and London-based Center for Global Development on Thursday also reported that Chinese development banks provided a whopping $23 billion to finance public-private partnerships in the region.
The figure is more than double the combined amount of $9.1 billion lent by banks in the U.S., Japan, Germany, the Netherlands, France and South Africa, the report found.
“This is well short of what the region needs for roads, dams and bridges,” said Nancy Lee, lead author of the study.
The global think tank examined more than 500 infrastructure projects in the region with a private sector component that reached financial closure during the period.
“There’s a lot of criticism of China, but if Western governments want to boost productive and sustainable investments to meaningful levels, they need to deploy their own development banks and press the multilateral development banks to make these investments a priority,” Lee said.
The report also found that despite the 2015 “billions to trillions” vision launched by multilateral development banks, institutions such as the World Bank provided only $1.4 billion per year to fund infrastructure projects in sub-Saharan Africa from 2016 to 2020.
The lack of transparency and use of collateralized loans by China has been of great concern to stakeholders in recent years.
Economists at the International Monetary Fund and the World Bank have warned that several low-income countries face or are already in debt distress.
Lee, a senior fellow at the Center for Global Development, said Western countries have been slow to hike investments despite “much rhetoric.”
“There’s a real opportunity for the U.S. to provide more leadership on infrastructure finance in Africa,” Lee noted.