Does China finance Africa more than European Union?
Thierry Pairault

This note examine the specific issue of development financing to African countries by European Union countries and institutions, and will attempt a comparison with China. It is drawn upon the statistical data produced by the Organisation for Economic Co-operation and Development (OECD) and published in tables detailing official development assistance (ODA) to countries and regions supported by the OECD's Development Assistance Committee (DAC). These commitments include official loans and grants, both concessional and non-concessional, as well as commercial financing with concessional elements. The data will be compared with those compiled in the Chinese Loans to Africa (CLA) database, which covers commitments by Chinese development finance institutions, commercial banks, government agencies and corporations to African governments, state-owned enterprises and regional multilateral institutions. The two databases do not cover the same exact items. The ODCE database is undoubtedly more limited in its scope than the CLA database.

Figure 1 illustrates the striking expansion in Chinese financing for Africa, which reached the same level as that of European Union countries and institutions in 2013. This marked the beginning of a remarkable period during which Chinese funding even surpassed European funding (in 2016). The period of financial euphoria began in 2013, the launching year of the New Silk Roads strategy, and ended in 2017. In this latter year, Xi Jinping delivered a speech at the World Economic Forum in Davos in which he praised liberalism but also made clear that he was seeking assistance in implementing reforms to the Chinese economic system. Subsequently, there was a notable decline in Chinese financing, with official flows from the European Union (countries and institutions) reaching twenty times the level of those from China by 2022.

Figure 1. – Africa and Official development finance (2000-2022)

Figure 2 illustrates the distribution of commitments between EU countries and EU institutions over the five post-Davos years, presented in comparison with China. Together, EU institutions, Germany and France account for 81% of European commitments (31%, 29% and 23% respectively), with each of them scoring higher than China.

 Figure 2. – Development finance commitments (2018-2022)