China’s position as a major lender to developing countries has changed over the past 10 years, with fresh loans to low- and middle-income countries in Africa sharply declining while debt repayments have continued to rise.
Ten years ago, China was a net source of credit, sending $48 billion to low- and lower-middle-income nations through both public and private lenders. Today, it is a net extractor of $24 billion. The greatest significant reversal in Chinese finance has occurred in Africa.
African nations experience net outflows from Chinese lending
ONE Data analysis released on January 27 found that African countries are now sending more money to China in debt repayments than they get in new loans.
The analysis revealed that Africa experienced the greatest impact in 2020–24, the most recent period for which data are available, with a $30 billion inflow from 2015–19 turning into a $22 billion outflow. “The fact that there’s less lending coming in, but that previous lending from China still needs to be serviced — that’s the source of the outflows,” said David McNair, executive director at ONE Data.
Many African governments are under increasing pressure to finance public services while relying less on external assistance as multilateral organizations step up funding. ONE Data analysis found that these multilateral institutions, such as the World Bank, now account for 56% of net flows, up from 28% ten years ago. Over this time, they have raised finance by 124%.
Cuts implemented in 2025 are not included in the data. David McNair stated that developing economies, particularly in Africa, have already been impacted by the closing of the U.S. Agency for International Development last year and a decrease in funding from other affluent nations.
McNair went on to say that official development assistance flows are expected to decline once data from 2025 becomes available in greater detail.
The research also noted a broader decline in private foreign debt and bilateral finance flows, both of which are expected to worsen with aid cuts starting in 2025. ONE Data revealed that long-term foreign debt from private sources, both public and publicly guaranteed, decreased from 19% of net flows to 1%. In the last five years, this kind of debt has dropped from $115 billion in net new resources between 2010 and 2014 to $7.3 billion.
African countries struggle under mounting public debt
African nations’ mounting debt to China and world lenders reflects the increasing fiscal strain on them. Between 2015 and 2024, African nations saw their average debt-to-GDP ratio climb from 44.4% to 66.7%. Lower public revenues and successive global crises drove this surge.
Over this period, Angola led African countries with the largest debt to China, at $21.0 billion, followed by Ethiopia at $6.8 billion, Kenya at $6.7 billion, Zambia at $6.1 billion, and Nigeria at $4.3 billion. Beyond these countries, others such as Egypt, South Africa, Cameroon, and Côte d’Ivoire also have large loans, demonstrating a broader trend across the continent in which China continues to be a significant creditor.
This broader pattern is reflected in Kenya’s overall debt situation. As of June 2025, Kenya’s public debt stood at 11.81 trillion shillings ($91.3 billion). According to Kenya’s Finance Minister John Mbadi, the debt-to-GDP ratio was 63.7% in net present value terms, which is regarded as sustainable but carries a higher risk of hardship.
Of the total debt, Mbadi revealed that 5.48 trillion shillings, or $42.38 billion USD, was external debt owed to creditors and development partners such as the World Bank, the African Development Bank, and China.
In the fiscal year 2024–2025, the government spent 1.72 trillion shillings ($13.3 billion USD) on debt payments. It paid 579 billion shillings ($4.48 billion USD) to foreign creditors and 1.14 trillion shillings ($8.81 billion USD) to domestic lenders.
In November 2024, the International Monetary Fund (IMF) stated that Kenya’s debt was still manageable but fragile. Due to sluggish fiscal restructuring, it issued a warning about the serious dangers posed by excessive debt across both external and total public debt.
Join a premium crypto trading community free for 30 days - normally $100/mo.
