China's Finance in Africa: What and How Much?

The Element provides an analysis of official finances from China to Africa, highlighting the use of Chinese finances for infrastructure projects. However, most of the funds are loans mortgaged on Africa's natural resources, with Chinese firms implementing the projects. It calls for Africa to institute a coherent foreign finances policy to ensure African countries benefit fully from these finances.

Format: Paperback / softback
Length: 75 pages
Publication date: 04 March 2021
Publisher: Cambridge University Press

This Element provides a comprehensive analysis of official finances from China to Africa, with a particular focus on the issue of Africa's foreign finances policy. The findings reveal that Africa faces a significant infrastructure gap, and Chinese finances play a significant role in funding infrastructure projects. However, the majority of these funds are in the form of loans, which are secured by Africa's natural resources. Additionally, Chinese firms are responsible for implementing the projects, with a significant amount of raw material and labor imported from China.

This raises several concerns, including the potential for debt traps, environmental degradation, and loss of economic sovereignty. To address these challenges, Africa needs to develop a coherent foreign finances policy that ensures that African countries fully benefit from these investments while also protecting their interests and promoting sustainable development.

One key aspect of this policy should be a focus on promoting infrastructure development that is sustainable, resilient, and environmentally friendly. This includes investing in renewable energy sources, improving transportation networks, and developing social infrastructure such as healthcare and education. Additionally, Africa should prioritize projects that create jobs and promote economic growth, while also ensuring that the benefits of these investments are shared fairly across the population.

Another important aspect of Africa's foreign finances policy should be to strengthen its engagement with international financial institutions such as the World Bank and the International Monetary Fund (IMF). These institutions can provide valuable expertise and support in developing and implementing sustainable finance policies, as well as in accessing concessional lending and development assistance.

Furthermore, Africa should work to diversify its sources of foreign finance and reduce its dependence on loans and other forms of external debt. This can be achieved through promoting investment in the private sector, attracting foreign direct investment, and developing export markets. Additionally, Africa can explore alternative financing mechanisms such as public-private partnerships, development banks, and microfinance institutions to provide access to finance for small and medium-sized enterprises (SMEs) and marginalized communities.

In conclusion, the analysis of official finances from China to Africa highlights the significant role that Chinese finances play in funding infrastructure projects in Africa. However, the majority of these funds are in the form of loans, which are mortgaged on Africa's natural resources. To address these challenges, Africa needs to develop a coherent foreign finances policy that promotes sustainable infrastructure development, strengthens engagement with international financial institutions, and diversifies its sources of foreign finance. By doing so, Africa can ensure that these investments contribute to its economic growth and development while also protecting its interests and promoting sustainable development.

Weight: 136g
Dimension: 151 x 229 x 10 (mm)
ISBN-13: 9781108789790