Data: Chinese Loans and Aid to Africa
Chinese loans to africa
Over the past decade, Chinese loans have reached all but a handful of African countries, and the Chinese have a sizable and growing program of development finance. Chinese loan finance has increased sharply since the early part of the millennium, but it is not as large as most observers seem to believe. As with many areas of China’s African engagement, there is considerable hype and a robust mythology associated with Chinese loan finance. Where and how much are Chinese banks really financing African development? In 2007, CARI researchers began collection, cleaning, and analyzing China’s African loans. CARI finds that
- From 2000 to 2014, the Chinese government, banks and contractors extended US $86.3 billion worth of loans to African governments and state-owned enterprises (SOEs).
- Angola receives the most Chinese loans, with $21.2 billion in cumulative loans over 15 years, roughly a quarter of all Chinese loans.
- Angola is followed by Ethiopia at $12.3 billion, Sudan at $5.6 billion, Kenya at $5.2 billion and DRC at $4.9 billion.
- Except for a slight dip in 2010 and a spike in 2013, the annual amount of loans signed grew steadily in this period.
II. Existing Data
The Chinese are not very transparent about their flows of overseas loans. China is not a member of the OECD and thus they do not participate in the OECD’s Creditor Reporting System, which is the source for much of the data we have on official flows from the wealthier countries. While Chinese policy bank officials do release data from time to time on their African loan commitments, this is not systematic in either their parameters or specificity. As is the case with the United States Export Import Bank and other export credit agencies, Chinese banks also rarely publish information regarding specific financing agreements. It is also uncommon for the recipients of such financing to fully disclose the details of the finance they receive.
While our project is the first effort to estimate Chinese loans in Africa from the bottom up, others have attempted to estimate “Chinese aid” and development finance in Africa. One approach is to collect media reports and aggregate them into a database. A study by the Rand Corporation used media reports and an expansive definition of “aid” (all Chinese government-related flows, including foreign direct investment) to estimate that “between 2001 and 2011, 49 countries in Africa received approximately US$175 billion.” Researchers at the College of William and Mary (AidData) used a “media-based data collection” (MBDC) methodology to estimate that China had provided US$75 billion in various kinds of official development finance to 50 countries from 2000 to 2011. As noted above, the Fitch Ratings agency estimated that just one Chinese bank, China Eximbank, had loaned “about US$67.2 billion” to sub-Saharan Africa between 2001 and 2010. The difference among these various projects is obviously stark. They reflect different definitions, and different methods and degrees of rigor in collecting, cleaning, and checking the raw data.
III. Why CARI Data?
While CARI does not have access to any special information not available to any other research efforts, CARI’s research team and research methodology allows us to compile a more rigorous database. Our loan database builds on previous work by Brautigam tracking Chinese aid finance. All data collection and cleaning was done by master’s or Ph.D. students and post-docs, working closely with and under the supervision of the project leader. Most team members were native Chinese speakers, and several also had French, Portuguese, and Arabic language skills. They were trained to use a rigorous set of steps in triangulating and cross-checking reports of loans, emphasizing official websites of central banks and ministries of finance, Chinese contractors, and our own personal contacts in China and in African countries. The desk work was supplemented by in-country interviews and meetings with Chinese and African officials. The “forensic internet sleuthing” methods that we employ cannot easily be replicated. The work is more akin to investigative reporting or detective work than accounting. Some sources are more reliable than others. Learning to judge information appropriately takes time, and depends deeply on experience, personal contacts, perseverance and inclination.
China’s External Assistance Expenditures, Annual (billion)
The figures below represent China's actual expenditures of foreign aid.* For concessional loans, they include on the cost of the interest rate subsidy, not the face value of the loan. For zero-interest loans (which are frequently forgiven when they mature), and grants, the amount represents the full disbursement. Africa is believed to receive approximately half of the value of Chinese aid expenditures.
(Exchange rate is the IMF annual rate)
Source: China Statistical Yearbook and personal communication, MOFCOM officials
*These are not believed to include medical teams, scholarship assistance, or contributions to international organizations.