Jakarta – China’s role as Africa’s leading development financier has undergone a dramatic reversal over the past decade. Once the continent’s largest source of bilateral lending, Beijing has increasingly shifted into the position of a net debt collector, with capital flows swinging by an estimated USD 52 billion.
According to The Great Reversal, a report by ONE Data for the Development Finance Observatory—a joint initiative of Google.org, ONE Data, and The Rockefeller Foundation—China provided USD 30.4 billion in net financing to African countries over the five years leading up to 2014. Over the past five years, however, that trend has reversed into net debt repayments of USD 22.1 billion flowing out of Africa to China.
As reported by Bloomberg on Wednesday (January 28), the shift reflects a broader change in China’s overseas lending strategy—from issuing large, multi-billion-dollar sovereign loans to African governments toward smaller, project-based financing, while simultaneously tightening repayment enforcement on existing debt. The transition has had wide-ranging implications for fiscal stability and economic growth across the continent.
Historical Reuters data shows that between 2010 and 2014, Africa still received net inflows of around USD 30 billion from China. That figure peaked during 2015–2019 at approximately USD 34 billion.
The trend reversed sharply during 2020–2024. Chinese inflows dropped to USD 23.4 billion, while outflows surged to USD 45.4 billion, resulting in a net capital outflow of roughly USD 22 billion.
This pullback is reinforced by findings from Boston University’s Global Development Policy Center, which show Chinese lending to Africa plunging from USD 28.8 billion in 2016 to just USD 2.1 billion in 2024.
In contrast, multilateral lenders have become increasingly dominant. ONE Data reports that institutions such as the World Bank have increased net financing to developing countries by 124 percent over the past decade. Between 2020 and 2024, multilateral financing totaled USD 378.7 billion, accounting for 56 percent of global net capital flows—double their share from ten years earlier.
“The issue is not only that new Chinese lending has slowed sharply, but that legacy debts still have to be repaid. That is what turns China into the largest source of capital outflows,” said David McNair, Executive Director of ONE Data, quoted by Reuters.
The figures, however, do not yet fully capture the impact of aid reductions beginning in 2025. The closure of the U.S. Agency for International Development (USAID) last year, combined with declining assistance from other advanced economies, is expected to intensify pressure on developing countries, particularly in Africa.
McNair estimates that once 2025 data becomes available, Official Development Assistance (ODA) flows will show an even steeper decline.
While the trend represents a net negative for African economies—tightening fiscal space for public services and investment—it may also carry longer-term implications. Reduced reliance on external financing could push governments toward greater domestic accountability, as they are increasingly forced to mobilize internal revenue sources.
Author: Faisal / FKY
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