AFRICA’S BIGGEST OFFICIAL LENDER: CHINA OR THE WORLD BANK?

Zambia's President Edgar Lungu, left, shake hands with China's President Xi Jinping, in Beijing, China, Saturday, Sept. 1, 2018.

In an oft-cited 2019 working paper titled "China’s Overseas Lending," we read that China has become the world’s "largest official creditor, easily surpassing the IMF or the World Bank…"

Is this true in Africa (All references to Africa in this article refer to all of Africa, including North Africa, rather than only sub-Saharan Africa)? It depends on how you define “official”. Available evidence shows that while credits from all Chinese financiers, including commercial banks and corporations, to African governments and state-owned enterprises, exceed those of the World Bank, the World Bank is still the largest official creditor in Africa.

The World Bank confirms that China is the world’s largest bilateral official creditor, meaning that it is the largest single creditor country. The Paris Club group of bilateral lenders comprising mostly developed countries from the global North were once large bilateral lenders in Africa, but by 2017 debt to the Paris Club amounted to less than 5% of external debt in Africa. Other bilateral lenders include Russia, India and Turkey, but their overseas lending programs are smaller than China’s.

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