CGF ODI AERC Conference 2024 | Session VII | African economy and financial sector
African economy and financial sector Paper 7: Green financial development, institutions, and sustainable economic growth. By Prof. Joshua Abor, University of Ghana Discussant: Dr Frangton Chiyemura, Open University Paper 8: Bank stability, bank business model and the financial resource curse. By Dr Sandrine Kablan, Université Paris-Est Créteil (UPEC) Discussant: Dr Pia Weiss, University of Nottingham Paper 9: Modelling monetary and fiscal policy to achieve climate goals in Africa. By Prof. Yener Altunbas & Dr Xiaoxi Qu, University of Bangor Discussant: Dr George Kararach, African Development Bank (AfDB) China’s infrastructure investment in Africa is immense. In 2005, only four African countries received infrastructure investment from China, while by 2023, this figure had risen to 46. The high growth of China’s infrastructure investment in Africa in the past two decades is primarily attributed to the pre-Covid period (61.45% from 2005-2019). We have seen a decline in this investment (-23.49% from 2020-2023) due to ongoing adjustment of China’s model of operating overseas infrastructure investment since Covid-19. Several factors contribute to this adjustment. First, in the past, China’s overseas infrastructure projects are often undertaken within an enclave system, including financing, procurement, construction, and loan repayment. The broken supply chains during Covid-19 made this operation impossible. Second, emerging domestic economic problems since Covid-19 have also become obstacles to China’s further economic growth, reducing China’s financial capacity. Third, the risk management of China’s overseas infrastructure investment was weak in the past. China has determined the destination and the scale of investment mainly based on diplomatic ties, geopolitical alignment, and political relationships with recipient countries, but negative shocks such as Covid-19 have brought about real consequences when host countries fail to repay China’s infrastructure lending. Fourth, geopolitics has become more important than ever in China’s overseas economic operations. The international community, including the US, EU, UK, and other OECD countries, has all enhanced regulatory scrutiny of Chinese investment due to national security concerns, leading to stronger public resistance to China’s economic activities in host countries. Consequently, trade wars and the competition for critical resources have resulted in a revamp of the global supply chains. Moreover, geopolitics also brought in more rivals to compete with China’s financing in emerging and developing economies. What do these changes imply for Africa? We will bring together researchers, policy makers and practitioners to discuss issues surrounding the China-Africa economic interactions through the lens of China’s infrastructure investment. The conference is hosted by the SOAS Centre for Global Finance, and co-organised by ODI and the African Economic Research Consortium (AERC).
