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Business Insider
4 days ago
- Business
- Business Insider
Top 10 African countries with the highest cumulative debt to China (2000–2023)
Over the past two decades, China's financial engagement with Africa has grown remarkably, primarily through infrastructure-focused loans. China's financial involvement in Africa has grown significantly, focusing on infrastructure-oriented loans. The Chinese Loans to Africa Database tracks loan agreements from 2000 to 2023, showing trends in lending amounts and loan dynamics. Angola leads as the top borrower, repaying loans through oil-backed mechanisms for reconstruction needs. These loans have helped build roads, railways, power plants in several African countries, but they have also raised questions about debt sustainability, repayment risks, and the long-term autonomy of African economies. The Chinese Loans to Africa Database, compiled by Boston University's Global Development Policy Center, provides a comprehensive record of loan agreements between China and African countries over a 13-year period, from 2000 to 2023. It reveals not only the total loan amounts but also the number of individual loan agreements signed between African countries and Chinese lenders. After several years of decline, Chinese lending to Africa increased in 2023 the first rise since 2016. This recent uptick shows a shift in Beijing's strategy toward projects with clearer financial viability, as China becomes more selective with its lending. Below is a ranking of the ten African countries with the highest total debt to China, based on the cumulative loan amounts and the number of loans recorded from 2000 to 2023. Rankings of top 10 African countries by debt to China Rank Country Total Loan Amount (USD) 1 Angola $46.0 billion 2 Ethiopia $14.5 billion 3 Egypt $9.7 billion 4 Kenya $9.6 billion 5 Nigeria $9.6 billion 6 Zambia $9.5 billion 7 South Africa $6.9 billion 8 Sudan $6.3 billion 9 Ghana $6.1 billion 10 Cameroon $5.9 billion Angola tops the list, borrowing $46 billion from China through 270 loans. Much of this debt stems from post-civil war reconstruction efforts, particularly in the oil and infrastructure sectors. Angola's model of repaying loans with crude oil became one of the earliest examples of resource-backed Chinese lending on the continent. Ethiopia comes second, with $14.5 billion borrowed via 66 agreements, highlighting the country's deep reliance on Chinese funds for its railways, power projects, and telecommunications infrastructure. Key developments like the Addis Ababa–Djibouti Railway have been financed almost entirely through Chinese lending. Egypt, Kenya, and Nigeria follow closely, each holding debts between $9.5 and $9.7 billion. Egypt's loans have supported transportation, electricity, and real estate projects, while Kenya's financing was pivotal in constructing the Standard Gauge Railway (SGR). Nigeria, similarly, has used Chinese funds for rail, road, and power initiatives. Zambia's debt of $9.5 billion comes from a notably high 82 loans, the largest number in the top ten. This suggests frequent borrowing, likely for smaller-scale or diversified infrastructure efforts. The remaining countries, South Africa, Sudan, Ghana, and Cameroon, each owe over $5.9 billion, reflecting years of engagement across transport, energy, and public service sectors. The growing debt to China shows Africa's dependence on external capital for development. On one hand, Chinese loans have enabled tangible infrastructure improvements that traditional Western financiers often hesitate to fund. On the other hand, the continent faces mounting concerns about debt distress, limited fiscal space, and vulnerability to external shocks.
Zawya
09-04-2025
- Business
- Zawya
Kenya's Payments Evolution: What banks and fintechs can learn from M-Pesa and mobile operators ?
I had the pleasure of growing up in Kenya in the 1970s, so every time I return, it always feels special. The city, Nairobi, has, of course, changed a lot and when I send photos back to the office some in the team remark that it looks like Las Vegas at night. In many markets that I get to travel to, the banks are desperately keen to drive digital experiences in the issuing and acquiring space. The same ambitions lie with the Kenyan banks – at least in words – but when it comes to action, it is always M-Pesa, other mobile money operators and fintechs that are driving the digitalisation agenda of payments locally. The banks are increasingly having to slug it out over a small market share, which, in broad terms, is declining mainly because others are innovating first and staying customer relevant. Where the banks should have been tokenising their cards first or offering virtual card issuance, the one that launched the proposition first was M-Pesa. M-Pesa's influence on the card-issuing market in Kenya is profound, driving changes in consumer behaviour, fostering competition and promoting innovations that integrate mobile money with traditional banking products. Nairobi is a hotbed of fintech; last year it saw by far the greatest amount of funding in Africa going to its start-ups. Conference organisers have jumped on the bandwagon. It feels that every other month there is a new payments conference being organised in Nairobi. The city itself, with five million people, is almost on a par with Addis Ababa and Cape Town and ranks about the 11th most populous in Africa, whilst the country's total population of around 57 million makes it the 7th largest by population. Kenya Vision 2030 Kenya's economy is on a transformative journey. Central to this is Kenya Vision 2030, a comprehensive development blueprint launched in 2008, which seeks to elevate the country into a newly industrialised, middle-income nation. The vision aims for an average GDP growth rate of 10% per annum and focuses on three main pillars: economic, social and political development. Heading into the final phases – and leaving the blip of the pandemic years out of the equation – Kenya has managed to achieve rapid double digit annual growth. The main flagship projects under Kenya Vision 2030 are aimed at stimulating job creation among Micro, Small and Medium Enterprises, whilst driving a digital economy by expanding access to technology and fostering innovation. Key themes include: Infrastructure Development and Energy Sector Initiatives. Standard Gauge Railway: to enhance major city connectivity, facilitating trade and travel. Road Network Expansion: Over 10,000km of roads enhancing accessibility and economic integration across the country and various bypasses around Nairobi. Mass Transit Systems: Development of rapid bus transport networks and light rail systems in major urban areas to ease congestion and improve public transport. Geothermal Power Development: aims to harness renewable energy sources, reducing dependence on fossil fuels and enhancing energy security. Wind Energy Projects: developing wind farms to diversify the energy mix. Manufacturing and Industrialisation Special Economic Zones: to attract foreign investment and promote manufacturing activities, particularly in textiles and leather production. Industrial Cluster Hubs: for specific sectors, such as the Athi River Textile Hub, aimed at fostering local production and job creation. Healthcare Initiatives Universal Health Coverage: to provide accessible healthcare services to all Kenyans, it includes building new health facilities and improving existing ones. Health Infrastructure Expansion: Construction of hospitals and clinics across the country to enhance healthcare delivery. Affordable Housing: by addressing urban housing shortages through public-private partnerships. Agricultural Transformation: Enhancing productivity and sustainability in agriculture and food security to improve agricultural productivity through modern farming techniques, irrigation projects and support for smallholding farmers. Education and Training: to build new secondary schools and vocational training centres to improve educational access and quality and hiring additional teachers to ensure adequate staffing in schools. The Capital City Powers the Economic Engine Nairobi is not only the political centre but also the financial heartbeat of East Africa. The establishment of the Nairobi International Financial Centre (NIFC) attracts both domestic and international investments, enhancing Nairobi's position as a regional financial hub. Backed by Strathmore University with its academic prowess and Innovation Labs, the city is already an attractive destination for businesses and investors alike. The main sectors fuelling Nairobi's economic expansion are: Information and Communication Technology (ICT): Nairobi is often referred to as 'Silicon Savannah' owing to its vibrant tech ecosystem. The ICT sector has seen rapid growth, with numerous start-ups and global giants like IBM and Microsoft, setting up operations in the city. Financial Services: remain a cornerstone of Nairobi's economy, with a concentration of banks, insurance companies and investment firms. Real Estate and Construction: both are booming, driven by urbanisation and a growing middle class. There is significant investment in residential, commercial and mixed-use developments. Major projects include shopping malls, office parks and housing estates catering to the increasing demand for modern living and working spaces. Manufacturing: While contributing a smaller percentage to GDP compared to other sectors, initiatives include food processing, textiles and consumer goods manufacturing. Tourism: Nairobi is a key gateway for tourists visiting Kenya's national parks and wildlife reserves. The city offers a mix of cultural experiences, wildlife attractions and business tourism facilities. Investment in hospitality infrastructure continues to grow, supporting the tourism sector's recovery post-pandemic. Healthcare: is experiencing significant growth, with both public and private investments aimed at improving service delivery. Nairobi attracts patients from across East Africa seeking specialised medical care owing to its advanced healthcare facilities. Renewable Energy: with an increasing focus on sustainability. T he Current Banking Market and Trends in Card Issuing and Merchant Acquiring As of 2025, Kenya's 46 commercial banks, despite lagging in payment innovation to others, remain robust. Major players include Equity Bank, Kenya Commercial Bank, and NCBA Bank, which dominate the market. Given the ever-present competition from M-Pesa, the banks seek to differentiate by enhancing customer experience through their digital banking solutions and personalised services, whilst continuing to streamline operations and reduce costs. Other actions being taken include: Enhanced Digital Services: Offering comprehensive easy-to-use mobile banking solutions. Fintech Partnerships: to integrate advanced payment technologies into their services. Customer Education: Promoting financial literacy to encourage customers to utilise a broader range of banking services beyond mobile money. Card Issuing However, the banks still have a lifeline as they continue to benefit from the fast economic and population growth. The key trends are still positive with an upward trend in debit and credit card usage as consumers shift towards cashless transactions and banks launch new products that cater to various demographics, including youth-focused cards with unique benefits. Some of the trends include: Rapid Growth of Prepaid Cards: Driven by consumer demand, banks and retailers are launching various prepaid card options. Contactless Payments: Rising fast with many newly issued cards having tap-to-pay capabilities. Increased Issuance of Debit and Credit Cards: As more consumers embrace banking services, the issuance of debit and credit cards is on the rise. Financial institutions are focusing on enhancing customer experience through innovative and digital card features and rewards programmes. Integration with Mobile Platforms: Card issuers are increasingly integrating their products with mobile payment platforms, allowing users to link their cards to mobile wallets for seamless transactions. This integration supports the growing trend of digital banking among younger consumers. Of the above, it is the prepaid card growth that is evolving the fastest. The key developments being: Strong Market Growth: The prepaid card and digital wallet sectors in Kenya had a compound annual growth rate (CAGR) of 16.5% from 2019 to 2023. This growth is projected to accelerate to 18.9% through to 2028, with the market expected to expand from US$1.70 billion in 2023 to US$4.12 billion by 2028. Diverse Product Offerings: The market is witnessing an increase in various prepaid card types, including: Open Loop Prepaid Cards; Closed Loop Cards issued for specific purposes like travel or meal allowances and Virtual Prepaid Cards especially among younger consumers for online transactions. Consumer Engagement and Spending Patterns are moving to everyday prepaid card usage across multiple demographic groups, whilst mobile wallets and contactless payment options are enhancing user experience and encouraging more consumer adoption. Increased Competition from a greater number of parties, including traditional banks leading to better product offerings, such as multi-currency prepaid cards introduced by KCB Bank and Mastercard. Focus on Financial Inclusion for the underbanked by providing access to financial services without the need for traditional bank accounts, making them an attractive option for many. Merchant Acquiring Merchant volumes accepting card payments are also increasing rapidly, driven by technological advancements, consumer demand for convenience, and fintech collaborations help to integrate payment solutions to support both online and offline transactions. Key trends are: Shift to Cashless Transactions: showing a marked increase. Diverse Payment Options: Merchants are expanding their payment acceptance methods to include mobile wallets, QR code payments and other alternative payment methods. Evolving POS acceptance: point-of-sale (POS) systems that accept multiple payment types, including contactless payments, are becoming standard. E-commerce explosion: is pushing merchants to enhance their online payment capabilities with many investing in secure online payment gateways. Despite positive trends, challenges remain in both card issuing and merchant acquiring Infrastructure Issues: with frequent outages, unreliable and slow network connectivity impacting transaction processing, particularly for acquirers. Continuous downtime in Kenya affects customer trust and operational efficiency. Fraud Concerns: The rise in digital transactions has led to increased fraud. Lenient penalties for fraudsters and inadequate enforcement of regulations contribute to a challenging environment. There is a need for stronger legal frameworks to mitigate fraud effectively. Need for Collaboration: to address common challenges within the card ecosystem, such as high operational costs and regulatory compliance issues. Specifically for bank-card issuers; they also face several challenges that are hindering the growth and efficiency of their operations. The main ones being: Non-Conducive Operating Environment: with the regulatory environment often not favourable for card issuers such as high taxation on card production, for example, a 25% duty on white plastic making local production less competitive compared to international firms. High Operational Costs: for investing in card technology and infrastructure are substantial. This is exacerbated by the lack of sufficient local investment from service providers, making it challenging for banks to maintain profitability in their card operations. Knowledge Gaps: in the card ecosystem among various stakeholders, can lead to incorrect valuations, resulting in punitive taxation and inadequate responses to fraud cases. Limited Consumer Awareness: where many are still unaware of the full benefits and functionalities of prepaid and credit cards, primarily viewing them as tools for withdrawing cash rather than for making purchases. Competition from dominant Alternative Payment Methods: As many consumers prefer these owing to their convenience, this leads to slower growth in card usage. As stated earlier, M-Pesa significantly influences the card-issuing market in Kenya in the following ways: Promotion of Financial Inclusion: M-Pesa has played a crucial role in enhancing financial inclusion in Kenya, increasing access to financial services by up to 82.9% by 2019. This expanded access brought more customers into the formal financial system, leading to increased demand for banking products, including cards. As more people become financially literate and engaged with digital payments, they are more likely to adopt debit and credit cards alongside their M-Pesa accounts. Shift in Consumer Preferences: The M-Pesa convenience and accessibility have shifted preferences towards cashless transactions. Many users view M-Pesa as a primary means of conducting financial transactions, which can limit the growth of traditional card usage. However, as M-Pesa integrates with card services (such as its partnership with Visa for virtual cards), it creates a hybrid model. Competition and Collaboration: Banks are increasingly collaborating with M-Pesa to provide integrated services that combine mobile money with traditional banking products. For instance, M-Pesa has enabled users to link their bank accounts and access credit facilities through its platform, which indirectly promotes card usage as part of a broader financial services package. Impact on Merchant Acquiring: M-Pesa transformed the landscape by providing merchants with an easy way of accepting payments without the need for traditional card infrastructure. This led to a rise in cashless transactions at retail points. The low M-Pesa transaction fees also pressure banks to reconsider their fee structures for card transactions. Technological Integration: The introduction of features like virtual cards linked directly to M-Pesa accounts allows users to make online purchases seamlessly, thereby bridging the gap between mobile money and traditional card payments. Powering Kenya's Payments Evolution with Stanchion Kenya's payments ecosystem is at a pivotal moment. While mobile money, led by M-Pesa, has revolutionised financial inclusion, banks now face a stark reality: their traditional dominance is fading, and survival depends on bold, technology-driven transformation. To compete in a mobile-first future, financial institutions must rethink their strategies—moving beyond legacy systems to embrace agile, interoperable digital payment solutions. This is where Stanchion's Payment Fabric provides a critical advantage. Modular and adaptive technology bridges the gap between legacy banking infrastructure and next-generation digital payment experiences. By enabling seamless integration across banking platforms, card networks and digital wallets, we empower financial institutions to innovate at speed, optimise costs, and deliver the frictionless digital experiences that modern consumers expect. To remain competitive, banks must invest in robust digital infrastructure, forge strategic partnerships, and prioritise customer-centric solutions that match the convenience of mobile money. With a global footprint and deep African market expertise, Stanchion is uniquely positioned to support this transition—helping banks build scalable, future-ready payment ecosystems that align with Kenya's dynamic, mobile-first economy. Stanchion is ready to collaborate and shape the future of payments with Kenyan Banks and Fintech's.
Asia Times
07-03-2025
- Business
- Asia Times
Can China keep winning without fighting?
China's global expansion under President Xi Jinping reflects Sun Tzu's principle of 'subduing the enemy without fighting.' Instead of direct military conflict, China relies on economic, diplomatic and technological influence. Through initiatives like the Belt and Road Initiative (BRI), economic coercion and cyber operations, China has reshaped the geopolitical landscape. However, this strategy is facing rising resistance. The United States and its allies have increased economic decoupling and military countermeasures. At the same time, China's internal challenges, including an economic slowdown and demographic decline, raise questions about whether this strategy remains sustainable. As tensions rise in the Indo-Pacific and global power shifts continue, can China maintain its rise without provoking the very conflicts it seeks to avoid? Sun Tzu emphasized winning through strategy, deception and psychological warfare rather than brute force. Xi has embraced these ideas, using economic dependencies and political maneuvering to expand influence without direct confrontation. Unlike his predecessors, who prioritized cautious economic growth, Xi has taken a more aggressive stance in asserting China's dominance on the world stage. Military confrontation with the US would obviously be costly. War would disrupt trade and economic stability, the two pillars of China's rise. Instead, China uses indirect means to weaken adversaries while at the same time presenting itself as a peaceful global power. This calculated approach has allowed China to avoid provoking a direct military response to its moves while steadily advancing its geopolitical goals. Economic expansion via debt diplomacy China's BRI is central to this strategy. Massive infrastructure investments in Asia, Africa and Europe have created economic dependencies. While China presents these projects as mutually beneficial, they often leave recipient countries financially burdened. One notable instance is Kenya's Standard Gauge Railway (SGR). China funded the SGR linking Mombasa and Nairobi, with plans to extend to Uganda. However, the project faces challenges like stalled progress and low usage, raising concerns about its financial sustainability and Kenya's debt burden. This pattern of debt diplomacy grants China long-term influence over key regions. Many countries accepting Chinese investments now find themselves caught between economic relief and political obligations. While these projects bring development, they also strengthen China's geopolitical reach, thus ensuring that nations remain aligned with its interests. At the same time, China has used trade as a weapon against countries that challenge its policies. When Australia called for an investigation into Covid-19's origins, China retaliated with tariffs on Australian wine, barley and coal. South Korea faced similar treatment after deploying the THAAD missile defense system by restricting tourism and trade. However, these tactics are not foolproof. Australia successfully redirected its exports to other markets, while South Korea strengthened its economic ties with the US and Europe. In addition, many nations are now diversifying trade partnerships to reduce reliance on China. While economic coercion has worked in the past, its effectiveness is diminishing as more countries push back against Beijing's pressure tactics. At the same time, China is aggressively expanding its dominance in technology, particularly in 5G, artificial intelligence and cybersecurity. Huawei's global expansion in 5G and other telecommunications has given China a critical edge in digital infrastructure. But it has also raised concerns over data security and espionage, resulting in bans and restrictions in many Western nations. China also employs cyber warfare as a key part of its strategy. It has launched disinformation campaigns and cyberattacks against adversaries, especially in Taiwan. These operations aim to weaken enemy defences and control narratives without direct confrontation. As technology becomes an increasingly powerful tool in global conflicts, China's ability to manipulate digital landscapes will remain a crucial element of its strategy. Diplomatic manipulation China has placed officials in key positions within the United Nations, the World Health Organization and other global bodies. By influencing international policies, China ensures that global governance aligns with its interests. This allows it to shape narratives, control regulatory frameworks and sideline opposition without resorting to force. One of Beijing's most significant diplomatic moves has been isolating Taiwan. China pressured several nations to sever ties with Taipei while increasing military provocations in the Taiwan Strait. The combination of diplomatic pressure and psychological warfare has made Taiwan's international standing increasingly precarious. The US was initially slow to respond to China's economic and diplomatic expansion. However, in recent years, Washington has ramped up efforts to curb China's influence. It has imposed tariffs, restricted Chinese technology companies and reinforced alliances in the Indo-Pacific. Initiatives like the QUAD alliance and the AUKUS security pact signal a coordinated effort to contain China. The US has also increased military patrols in the South China Sea and provided arms to Taiwan. These measures indicate that Washington is no longer willing to let China expand unchecked. Despite its successes, China faces mounting challenges. Economic growth is slowing, and an aging population threatens long-term stability. Beijing's real estate crisis and mounting debt add to its vulnerabilities. If China's economic power weakens, its ability to sustain global influence may also decline. Furthermore, China's aggressive policies have alienated key trading partners. Countries that once saw China as an economic lifeline are now exploring alternatives. The US dollar remains dominant in global finance, limiting China's ability to reshape the economic order. As China grapples with internal and external pressures, maintaining its current strategy is becoming increasingly difficult. Risk of military confrontation China's expansionist ambitions in the South China Sea and Taiwan Strait could provoke a military clash with the US. While China has so far avoided direct war, its increasing military presence and confrontational tactics are heightening tensions. The US and its allies have repeatedly warned against unilateral actions in the region. If China oversteps, it risks a conflict that could derail its long-term ambitions. China's leadership understands these risks. However, rising nationalism, domestic pressures and trade tensions could push Beijing toward more aggressive moves. If China miscalculates the response of the US and its allies, it could find itself embroiled in a conflict it is not prepared to fight. China has successfully expanded its influence so far without engaging in direct warfare. Sun Tzu's principle of winning without fighting remains a core pillar of its approach. However, growing global resistance, economic instability and military risks threaten the long-term sustainability of this strategy. The US and its allies are increasingly countering China's moves. Trade diversification, military cooperation and technological restrictions are making it harder for China to operate unchallenged. Meanwhile, internal struggles ranging from a fast-aging population to an economic slowdown may further limit China's ability to project power. The coming years will determine whether China can continue expanding without triggering the conflicts it seeks to avoid. While it has demonstrated that war is not the only path to dominance, sustaining this approach in a shifting global order will be its greatest challenge yet. Tang Meng Kit is a master's student in international relations at the S Rajaratnam School of International Studies (RSIS) in Singapore.
South China Morning Post
06-02-2025
- Business
- South China Morning Post
‘Game changer': why Chinese rail contractors have East Africa in their sights
Published: 12:00pm, 6 Feb 2025 Updated: 3:09pm, 6 Feb 2025 Chinese rail contractors are consolidating their foothold in East Africa as part of a twin effort to improve the region's connectivity and tap into its abundant reserves of strategic minerals. Last week, a consortium of Chinese companies won a US$2.15 billion deal to build a railway line linking Tanzania's main port of Dar es Salaam with Burundi's nickel mines. It was the third contract of its kind to be awarded to firms from China and will take 72 months to deliver, including a 12-month observation period. Financing is through a concessional loan from the African Development Bank . Landlocked Burundi, with an estimated 185 million tonnes of nickel, is among 10 countries known to have important deposits of the metal – one of the critical minerals that are in high demand as the world rushes towards a green energy transition. Once completed, the 282km (175 miles) line to be built by the consortium – which includes China Railway Engineering Group and China Railway Engineering Design and Consulting Group Co – is expected to move 3 million tonnes of ore per year. Masanja Kungu Kadogosa, director general of the Tanzania Railways Corporation, reaffirmed its commitment to the Standard Gauge Railway (SGR) project that will ultimately link Tanzania, Burundi and the DR Congo .
