Africa’s financing in a fracturing world

While Chinese lending to Africa has fallen sharply from its peak last decade, China will remain a big player in the region’s external financing – particularly if some of the foreign exchange generated by China’s enormous trade surplus is recycled in politically-aligned countries. This investment may help to develop infrastructure and foster integration into Chinese manufacturing supply chains. But given the complexity that this debt has added to recent restructuring efforts, countries that are heavily indebted to China may find investment from the West harder to come by. One consequence could be that financing fractures along geopolitical lines.