A major shift in global development financing has seen many African countries now sending more money back to China in debt repayments than they receive in fresh loans, reflecting a significant change in how the continent is funded. According to a new analysis, China’s role as a key source of new financing has diminished sharply over the past decade, while repayments on past loans continue to rise. As a result, the balance of funds has swung from large net inflows in the mid-2010s to net outflows in recent years, meaning more money is leaving African economies to service Chinese debt than is coming in as new credit.
The change has occurred at the same time that multilateral institutions such as the World Bank and regional development banks have increased their net financing to developing countries, becoming the main source of external development funds once debt payments are taken into account. For many African governments already facing tight budgets and rising public spending needs, the new dynamic adds financial pressure at a time when Official Development Assistance from other donors has declined.
Experts say the shift highlights both the maturing debt relationships between China and African states and the broader changes in global development finance, with implications for how governments plan future investments and manage external debt. The trend may also encourage some countries to strengthen domestic revenue mobilization and reduce reliance on external borrowing, but the transition will require careful economic planning to avoid service disruptions and ensure that development priorities are met.