China to Provide Africa With US$1 Trillion In Financing

China to Provide Africa With US$1 Trillion In  Financing
Export-Import Bank of China

AFRICANGLOBE – The central government, including state-owned banks, will provide US$1 trillion of financing to Africa in the years to 2025, says Zhao Changhui, the chief country risk analyst at Export-Import Bank of China (Eximbank).

Eximbank, a leading lender to overseas Chinese projects, will account for 70 to 80 per cent of that US$1 trillion, which will include direct investments, soft loans and commercial loans, Zhao said at the recent Africa Investment Summit in Hong Kong.

“We have plenty of money to spend,” he said. “We have the budget for major projects. China has US$3.5 trillion of reserves, which cannot just buy US treasuries. We need to use part of them in overseas investments.

“Africa for the next 20 years will be the single-most important business destination for many Chinese mega corporations.”

The US$1 trillion of future financing was a big increase from China’s previous financing of Africa, Zhao said without giving exact numbers. Last year, Eximbank provided tens of billions of dollars to Africa.

Zhao said Eximbank was looking to participate in infrastructure projects in Africa, including transnational highways, railways and airports. He estimated it would cost US$500 billion to build a continental rail network.

“Africa is infrastructure-light right now. There is intense need for electrification,” said Jeff Gable, the managing principal of Africa non-equity research at Barclays.

Eximbank was in negotiations with the government of the Democratic Republic of Congo to finance air corridors in the country, which might possibly include leasing or purchase of aircraft, Zhao said.

Congo’s road network is inadequate, so air travel was needed as an alternative transport mode, he said.

Another promising sector is agriculture, according to Zhao. “Africa has vast fertile land. If China and Africa can work together in agriculture, hunger [in Africa] can be alleviated in 10 to 15 years,” he said.

Africa has the potential to be the world’s next breadbasket, with the continent’s agriculture poised to grow from a US$280 billion industry to an US$880 billion industry in the next two decades, Gable said.

One major risk was a lack of co-ordination among African nations in building a continental transport infrastructure, Zhao said. For example, small neighbouring states would build airports, which would duplicate infrastructure, he said.

Last month, state-owned China Machinery Engineering Corp signed a US$127 million contract to build and expand power grids in six cities in Equatorial Guinea, and a US$199 million contract to build a highway power supply system in the nation, the Hong Kong-listed firm announced.

In July, CMEC won contracts to build two power plants in Nigeria for US$621 million.

In March, it was reported that state-owned China Development Bank had overtaken the World Bank and Asian Development Bank as the world’s largest financial institution for overseas loans.


By: Toh Han Shih

  • This is a Scam on African Banks, They have their own wealth, don’t need China Money. The oil industry just stole 25 trillion dollars from Africa, When China got involved, I knew their blatin thiever surpasses America and European countries, Raise up Africa Stop this Now! Do no Business with other countries, they have already stolen your wealth now they are naming what they own. No one is that nice, Don’t be fools forever.

  • I am over seeing this a million times. Don’t countries know by now that when they financially give to us, our politicians take it & it never goes beyond their new cars and homes. What an absolute waste of money!

  • The yellow man was grafted right before the white man he is the lesser of the two evils but very dangerous

  • Financing equals debt, I don’t think they should take the money

  • I don’t know what to say about this. It looks like a trap.

  • Africa; the 47 Black African nations export collectively 1 trillion dollars every month in gold , platinum, coltan, lithium, and oil. so what is the Yellow man providing the Black man that they cannot provide for themselves??? AND THE INTEREST RATE ON THAT TRILLION DOLLARS IS WHAT????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

  • Chinese people DO NOT care about Africans. Chinese people want our rich natural resources to benefit themselves NOT us.

  • read the fine print

  • Africa has everything she needs to advance herself EXCEPT educated, honest, good African leadership to make it happen. This lack of African is why Africa for centuries continue to be used & abused by outside forces & foreign nations…… I will never understand this.

  • The European’s did and now we have the Chinese !

  • I don’t know to applaud (investments in Africa) or deplore what seems to be 21st century imperialism (Chinese African scramble).

    Considering that more Chinese presence in Africa will irremedially mean more US presence (Africa-Com) & European (Mali & corporations all over). More Indian & Russian presence is to be expected… My Afrocentric pride would prefer more Brazil investments due to racial, historical & cultural ties.

    But still, Africa must rise on its own. Daam neocolonialism. African spring w/o foreigners is much needed. We have millionaires & billionaires. Where the African major investments in Western countries or China?

    Notice no word on investment in education or governance (Beijing consensus). After all it must be the priority of Africans by & for Africans. Soon Africans will be insist on kids to learning Mandarin instead of French/English. Already happening in Ethiopia (& more Africans going to China for Yuan money & facing racism).

    I wonder what giants as Fanon or Lumumba would think from their graves…

  • Africa’s new name will be Chafrica!