The congresses of the Chinese Communist Party (CCP) may follow each other, and look alike, but the latest one – which took place from October 16 to 22 – could bring its share of changes. Indeed, a certain shift in Beijing’s economic strategy on the continent is to be expected. From now on, loans to African states will only be granted after a thorough assessment of applications. Disbursements could thus be made through specific programs and depend on the capacity of each country to repay its debts.
China is thus departing from the African infrastructure financing model that has made its reputation over the past decade, reaffirming its desire to modify its lending policy in Africa and reduce its investment projects. The review of ongoing debt repayments will also determine the granting of new loans to African states, which have gone deeper into debt in recent years.
China-Africa: Beijing only lends in dribs and drabs
After the CCP’s last National Congress, which reappointed President Xi Jinping, Chinese Ambassador to Kenya Zhou Pingjiang gave a press conference where he sketched out what could look like a new economic doctrine “We are ready to listen, discuss and improve cooperation as equal partners […] The Chinese can fit into some programs, and in the future, the priority of our cooperation will be decided by the two parties involved,” he said.
>> Read on The Africa Report – What China’s new lending rules will mean for African states
China’s new economic leadership will take office next year. It remains to be seen whether the world’s second-largest economy will approach the foreign market differently, or whether it will rejuvenate its investments under the Belt and Road Initiative (BRI). However, experts believe that the statement of the ambassador to Kenya does not mention the debt burden, and does not deviate much from the current lending policy. Capping loans, and freezing covenant secrecy, would be a significant policy change, but it’s unlikely to happen, said Churchill Ogutu, an economist and analyst at investment firm IC Group. ” I do not think that [les clauses de confidentialité] are going to change. There will be no trigger point, because nothing has changed in the last ten years,” he thinks. “But most countries should be careful not to expose their assets, while engaging Chinese lenders. »