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Chinese strategy yet . Angola accounts for majority of loans in return for oil deliveries ( Figure 6 ). China , providing funds for Angola ’ s infrastructure development while filling in for the declining oil demand of the U . S .
Once again , Chinese presence is seen mainly in Sub-Saharan Africa , where its influence has mainly focused . 92 percent of committed loans were reported to be towards Sub-Saharan African countries . In terms of share in total debtness , Chinese loans were the greatest in Central , Western and Eastern regions of Africa ( Figure 7 ). 8
Starting from the late 1990s to mid-2000s , FDI to Africa in general grew substantially . Investments to Sub-Saharan Africa continued to rise until 2012 as North Africa witnessed investments leaving the continent . Since 2015 , mainly in parallel to slowdown in global and in particular in Chinese economy , FDI has mostly been negative for Sub-Saharan Africa and stable for North Africa , while Sub-Saharan Africa still continues to receive three times more investments annually than North Africa ( Figure 8 ). 9 China , investing heavily on Sub-Saharan Africa in accordance with its Belt and Road Initiative ( BRI ), contributed to growing FDI gap between the two regions .
Figure 7 Distribution of Chinese Loans in Africa / Source : CARI
Some of the highlighting points regarding Chinese crediting practices have been as follows .
• China accounts for 22 percent of African government external debt and 39 percent of government-togovernment deals .
• Multilateral institutions like the World Bank accounts for 35 percent of African government external debt .
• Private bond holders account for roughly 30 percent of all debt ( including non-guaranteed ).
• nterest payments to private creditors external interest payments account for 55 percent .
FOREIGN DIRECT INVESTMENTS ( FDI ) Africa is in need of large amounts of investment to overcome its poor infrastructural problems . Despite the unprecedented flow of foreign direct investment ( FDI ), the Continent was reported to have 130-170 billion US $ annual gap of infrastructure investments ( 2018 ).
Great majority of African countries are underdeveloped , economies over reliant on natural resources ( and thus their global prices ), have ongoing domestic conflicts and constant political fluctutations . These characteristics deteriorate economic sphere and cause FDI inflows to vary significantly from one year to another . Despite these mentioned risks , China has invested
Foreign direct investment ( FDI ): Refers to direct investment equity flows in the reporting economy . It is the sum of equity capital , reinvestment of earnings , and other capital . Ownership of 10 percent or more of the ordinary shares of voting stock is the criterion for determining the existence of a direct investment relationship .
Figure 8 FDI Inflows ( Current US $) / Source : World Bank
8 . http :// www . sais-cari . org / data 9 . https :// data . worldbank . org / indicator / BX . KLT . DINV . CD . WD ? locations = ZQ
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