Press Release

New Study: China Lends 2.5x as US, UK, Japan, Germany Combined for Infrastructure in Sub-Saharan Africa

February 09, 2022
Contact: Jeremy Gaines
Center for Global Development
+1 (202) 416-4058

New US International Development Finance Corporation, multilateral development banks need to make infrastructure in the region a major priority, researchers say

WASHINGTON — China’s development banks lent more than twice as much for public-private infrastructure projects in sub-Saharan Africa as the US, Germany, Japan, and France’s development finance institutions combined, according to a new study from the Center for Global Development.

Researchers at the global think tank examined the 535 infrastructure deals in sub-Saharan Africa with a private sector component that reached financial closure between 2007 and 2020. They found that China’s investments in public-private infrastructure deals in sub-Saharan Africa dwarfed that from other governments and from multilateral development banks.

The study also found no sustained upward trends in overall sub-Saharan African public-private infrastructure finance, finance from multilateral development banks, private finance, the share or volume of local private finance, participation by international institutional investors, or finance from bilateral lenders.

“Despite much rhetoric about using public finance to attract large amounts of private infrastructure investment in sub-Saharan Africa, overall public-private infrastructure investment remains stuck at around $9 billion a year, well short of what the continent needs,” said Nancy Lee, the lead author of the paper and a senior policy fellow at the Center for Global Development. “There is a lot of criticism of China. But if Western governments want to boost productive and sustainable investments to meaningful levels, they need to deploy their own development banks and press the multilateral development banks to make these investments a priority.”

The researchers found that:

  • Between 2007 and 2020, China Exim Bank and China Development Bank provided $23 billion in financing, while all other major development finance institutions combined provided $9.1 billion.

  • The principal US government development finance institution, the US Overseas Private Investment Corporation, now the US International Development Finance Corporation, lent $1.9 billion for infrastructure between 2007 and 2020, less than a tenth of what China provided.

  • Multilateral development banks like the World Bank have also not significantly stepped up their efforts, even following the 2015 “billions to trillions” vision launched alongside the UN’s Sustainable Development Goals. These institutions provided an average of just $1.4 billion per year for public-private infrastructure deals in sub-Saharan Africa from 2016-20.

Infrastructure Finance from Bilateral Development Institutions – 2007-2020

China (China Exim Bank and China Development Bank) $23 billion USD
Japan (Japan Bank for International Cooperation and Japan International Cooperation Agency) $2.4 billion USD
Germany (KfW and DEG) $2.2 billion USD
US (formerly OPIC, now USDFC) $1.9 billion USD
The Netherlands (FMO) $1.1 billion USD
South Africa (Development Bank of Southern Africa) $0.8 billion USD
France (Proparco) $0.6 billion USD

“For the new US International Development Finance Corporation to be a major and influential player in meeting Africa’s infrastructure needs, it will need the full support of the Biden administration and Congress. In the near term, that means providing the agency with sufficient budget and fixing the budget treatment of equity investments,” Lee said. “In the longer term, that means raising the cap on the size of DFC’s investment portfolio.”

“The US, as a major shareholder in all of the multilateral development banks, has an outsized role in shaping their priorities. These banks have a unique set of finance, policy, and technical assistance tools that can address the challenges of infrastructure finance in sub-Saharan Africa and help bring in the private sector. The good news is that the African Development Bank punches well above its weight. But even with its recent capital increase, it is capital-constrained and lacks anywhere near enough concessional resources for the poor countries of the region,” Lee said.

“There’s a real opportunity for the US to provide more leadership on infrastructure finance in Africa. If Build Bank Better is the right policy at home, its rationale is even stronger abroad in a region still grappling with huge infrastructure gaps.”

The full study, “Stuck Near Ten Billion: Public-Private Infrastructure Finance in Sub-Saharan Africa,” is available at /publication/stuck-near-ten-billion-public-private-infrastructure-finance-sub-saharan-africa.