China in Africa: lending, policy space and governance

China in Africa: lending, policy space and governance

Are the criticisms of Chinese aid policy in Africa justified?

China has had bad press regarding its involvement in sub-Saharan Africa. Its lack of aid conditionality – particularly in the field of human rights and environmental issues; its apparent disregard for transparency in the loan contraction processes and its general lack of adherence to international standards in responsible funding has caused alarm in the donor community.

However although this paper largely agrees with and expands on these criticisms it also seeks to highlight the benefits of Chinese involvement. For instance:

  • China’s lack of aid conditionality has seen many country's policy space increase
  • China as an alternative in the creditor arena is increasing the leverage that African countries have when dealing with traditional creditors
  •  China offers long repayment schedules over and above those of traditional donors. 

The authors then consider the way forward with respect to the country as a major player in the African aid environment and present a number of recommendations including:

  • the urgent need to establish internationally recognised legal standards for responsible lending
  •  how African nations must act to ensure that responsible lending is adhered to
  • the need for African governments to allow public scrutiny in the loan contraction process – the legitimacy of loans contracted will increase and hopefully debt levels in Africa will stabilise
  •  How civil society must put pressure on China and engage in dialogue with China and other donors

The report ends with a case study of the Zambian aid experience with China in order to illumine the impact of large Chinese involvement in an African nation. A number of recommendations are presented for both civil society and parliament – for instance Zambian public should have a right to know about all borrowing before loan agreements are signed; Zambian oversight and watchdog institutions must have clear mandatory authority over the borrowing process.

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