Keypoints:
- African countries now send more money to China than they receive
- New Chinese lending has fallen sharply over the past decade
- Multilateral lenders have become the largest net financiers
AFRICAN nations are now paying more money to China in debt repayments than they receive in new loans, marking a dramatic reversal in Beijing’s role as a leading financier to the developing world, according to new analysis released by the ONE Data initiative.
The findings show that China’s overseas lending has declined sharply over the past decade, while repayments on earlier loans — many issued during the peak of Beijing’s infrastructure financing boom — continue to rise across low- and middle-income economies.
The shift signals a fundamental change in global development finance. While China remains one of the world’s largest bilateral creditors, it is no longer expanding its lending footprint. Instead, debt servicing now outweighs new inflows, pushing African governments into net financial outflows just as multilateral lenders emerge as the primary source of development funding.
China lending slows as repayments rise
ONE Data’s inaugural report found that many developing countries are now transferring more funds to China each year than they receive in fresh financing from the world’s second-largest economy.
The downturn reflects Beijing’s retreat from large-scale overseas lending following pandemic-era economic pressures, rising default risks and growing scrutiny of debt sustainability in borrower countries.
‘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.
Africa records the largest reversal
Africa has experienced the most dramatic swing in Chinese finance.
Between 2015 and 2019, the continent recorded net inflows of nearly $30bn from China. During the 2020–2024 period, that position reversed into a net outflow of $22bn — a $52bn shift driven almost entirely by debt repayments overtaking new loans.
The figures underline how quickly the financial relationship has changed. Projects once funded through concessional or semi-commercial Chinese loans are now entering peak repayment periods, while new commitments have slowed to a trickle.
For many governments, the reversal has tightened already strained public finances, limiting room for investment in infrastructure, health and education.
Multilateral banks step into the gap
As Chinese and other bilateral financing has fallen, multilateral institutions have taken on a far greater role.
According to the report, net financing from multilateral lenders increased by 124 percent over the past decade. These institutions now account for 56 percent of total net financial flows to developing economies.
Between 2020 and 2024 alone, multilateral banks provided roughly $379 bn in net financing once debt-service payments were deducted — making them the dominant source of external development funding worldwide.
Institutions such as the World Bank and regional development banks have increasingly focused on stabilisation lending, climate finance and budget support as debt vulnerabilities spread across emerging markets.
Aid cuts expected to deepen pressure
The ONE Data analysis does not yet capture funding cuts that took effect in 2025, which are expected to further reduce financial flows to developing countries.
The closure of the United States Agency for International Development last year, alongside lower aid allocations from several advanced economies, has already begun to affect African budgets.
Once 2025 data becomes available, Official Development Assistance flows are likely to show a substantial decline, McNair said.
He warned that while reduced dependence on external financing may strengthen domestic accountability, the immediate impact is negative for countries already struggling to fund essential public services.
Financing model under strain
The report also highlights a broader contraction in bilateral finance and private external debt — trends likely to intensify as global interest rates remain elevated and donor budgets tighten.
For Africa, the changing landscape presents a difficult balancing act: managing large repayment obligations while securing enough long-term financing to support growth, climate resilience and social stability.
As China’s lending era fades and multilateral banks assume centre stage, the continent’s development trajectory will increasingly depend on debt restructuring, fiscal reform and the ability of governments to mobilise domestic resources in an increasingly constrained global system.
