Estimating the Economic Impact of Chinese BRI Investment in Africa

Part of the Olkaria geothermal power generation complex seen from a vantage point on the floor of the Kenyan Rift Valley, near the shores of Lake Naivasha. Image: Getty, Tony Karumba/AFP
Part of the Olkaria geothermal power generation complex seen from a vantage point on the floor of the Kenyan Rift Valley, near the shores of Lake Naivasha. Image: Getty, Tony Karumba/AFP

China’s investment in African infrastructure as part of its Belt and Road Initiative has proven to be both transformative and controversial. While investment projects are helping Africa to close its infrastructure gap, they have also raised fears of runaway debt levels.

Summary:

  • China’s Belt and Road Initiative (BRI) has transformed developing countries’ infrastructure financing options.
  • Determining the development impact of Chinese investment projects remains challenging, not least because many are still under way.
  • In African countries like Ethiopia, Kenya and Nigeria, BRI projects have resulted in marked improvements to sectors like transportation.
  • The BRI offers significant opportunities for African countries to address their substantial infrastructure deficit, but it also presents risks to the environment and debt sustainability.
  • The impact of BRI projects will not be evenly shared among BRI recipient countries in Africa. Countries that are resource-rich and strong commodity exporters will benefit more than smaller economies.
21 Jun 2021
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Research by
Series
Special Report June 2021
Country
China, Ethiopia, Kenya, Nigeria
SAIIA Programme
Foreign Policy
Tags
Belt and Road Initiative, Infrastructure
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