China in Africa: An Examination of the Impact of China’s Loans on Growth in Selected African States

Abstract

This study sought to test the impact of China’s infrastructure investment on economic growth in selected African states. Many comparative studies have shown the positive role that infrastructural loans plays in supporting economic growth. However, for Africa, the role of China’s infrastructure projects has mixed views with regards to its contribution to growth and development. A survey of the literature showed that the central question about Chinese infrastructural loans is whether the infrastructural projects are beneficial or detrimental to Africa. Currently, there is no settled opinion as to whether (or not) Africa is benefiting from the Chinese economic relations. This study was quantitative, and we used panel data to achieve our objectives. The study employed annual panel data for 15 African countries covering the period of 2000–2017. The Pooled Mean Group, Mean Group, Fully Modified Ordinary Least Squares, and Dynamic Ordinary Least Squares panel techniques were used for estimation purposes. The main conclusion from the quantitative analysis of China’s infrastructural loans in Africa is that China’s efforts in developing infrastructure are translating into economic growth. This study provides evidence that China’s engagement in Africa could be beneficial, given the positive relationship between loans and economic growth.

China’s technological footprint in Africa: A patent network analysis

“…In this context, the burgeoning economic presence of China in Africa has catalysed extensive academic discourse. Mlambo (2022) scrutinises the sustainability of China's African investment model, focussing on institutional quality. Jones and Ndofor (2022) highlight the growing concern of African indebtedness linked to Chinese investments.…”

“…The extensive literature on China's growing economic and technological influence in Africa encompasses diverse perspectives, delving into institutional quality (Mlambo, 2022), debt dynamics (Jones & Ndofor, 2022), inclusive development (Debongo et al, 2022), small-and medium-sized enterprise (SME) engagement (Chen, 2020;Runde et al, 2021) and the broader impact on local suppliers and industries (Giovannetti & Sanfilippo, 2016;Shen, 2014;Shen & Power, 2016). This body of work also highlights a pivotal shift from China's focus on infrastructure to innovation in applications and services (CIO, 2021;Hruby, 2021), raising critical discussions about dependency and security concerns (Enuka, 2011;Mason, 2017).…”

Perspective chapter: Examining the intersecting connections between intersectionality and socioeconomic inequality

“…These debt loads frequently have restrictive terms attached to them, making it difficult for debtor countries to make investments in infrastructure, social welfare initiatives, and education. Therefore, resources that may be used to lower socioeconomic inequality and alleviate poverty are diverted towards debt repayment, exacerbating the problems already faced by marginalised populations [53]. Furthermore, international socioeconomic inequality is also largely sustained by trade policy and globalisation.…”

Assessing the Socio-Economic Impact of the Chinese Transfer of Values, Skills, and Technology in Infrastructural Development in Kenya

“…The findings of the study indicate that Kenya continues to rely extensively on bilateral funding from traditional donors. Moreover, despite the increased funding from China, the country's association with Western nations has not experienced a substantial decline (Mlambo, 2022).…”