China Moves Deeper into African Banking

 Uganda's The Observer published on 5 December 2025 an article titled "China's Payment System Gains Ground in Africa as Afrexim, Standard Join In."

Afreximbank, Africa's multilateral trade bank, became the first major African institution to join China's Cross-Border Interbank Payment System (CIPS), enabling direct and cheaper yuan transactions.  Standard Bank Group, the continent's largest lender, followed suit.  CIPS gives China an alternative to the Western world's SWIFT. 

The Industrial and Commercial Bank of China (ICBC) owns 20 percent of the Standard Bank Group while the Export-Import Bank of China holds at least 6 percent of Afreximbank.   

Environmentalists Target Chinese Financing of Uganda-Tanzania Oil Pipeline

The South China Morning Post published on 22 November 2023 an article titled "China Targeted by Climate Campaigners over Controversial East Africa Oil Pipeline Project" by Jevans Nyabiage.  

Environmental activists in Uganda, Tanzania, DRC and elsewhere are pressuring Chinese financers to back out of an oil pipeline project that runs from Ugandan oilfields to Port Tanga on Tanzania's Indian Ocean coast.  The activists say the pipeline threatens pristine ecosystems, biodiversity hotspots, water resources, and community land.  

China Restructures Its Global Infrastructure Initiative

 AIDDATA, a research lab at William & Mary, published in November 2023 a massive 393-page study titled "Belt and Road Reboot: Beijing's Bid to De-Risk Its Global Infrastructure Initiative" by Bradley C. Parks, Ammar A. Malik, Brooke Escobar, Sheng Zhang, Rory Fedorochko, Kyra Solomon, Fei Wang, Lydia Vlasto, Katherine Walsh, and Seth Goodman.  

The study concludes that Beijing's annual international development finance commitments--mostly other official flows (OOF) and much less overseas development assistance (ODA)--have not plummeted to nearly zero as some reporting has suggested. In spite of recent declines in lending, China remains the world's single largest source of international development finance.  China's ODA and OOF commitments to low- and middle-income countries are now hovering around $80 billion a year.  

Comment: the study is not, however, organized on a geographical basis and Chinese loans only to Africa have fallen to about $1 billion annually in recent years, down from a high of $28 billion in 2016.  The drop in Chinese loans has had a much greater impact on Africa than on the rest of the Belt and Road Initiative countries.  End Comment

By comparison, due in large part to the U.S. International Development Finance Corporation's financing of private sector projects, Washington now provides about $60 billion of development finance each year to low- and middle-income countries.  

In an effort to de-risk financing, China is ratcheting down its use of the policy banks--China Export Import Bank and China Development Bank--while ratcheting up its use of state-owned commercial banks, such as ICBC and Bank of China.  Beijing is putting in place increasingly stringent safeguards to shield itself from the risk of not being repaid.  Comment:  This accounts for much of the sharp drop in recent lending to countries in Africa.  

China Reviews $1.3 Billion in Loans for Ethiopia

 The Addis Standard published on 21 October 2023 an article titled "Ethiopian Authorities Discuss Release of $1.3 Billion Suspended Loan with Chinese Counterparts."

Chinese financial institutions have suspended the disbursement of loans totaling $1.3 billion for at least 8 infrastructure projects pending renegotiation of Ethiopia's debt restructuring with the Chinese government.  Chinese banks did not disburse any loans to Ethiopia in 2021 and 2022 and only $26 million so far in 2023.  The Ethiopian government seems optimistic that Chinese banks will release more of the funding.