Chinese Loans to Africa: The Economist Gets it Wrong

On September 7th The Economist published an article, “China in Africa: Beyond Belt and Road,” with a graph on “murky” Chinese lending into Africa that really muddied the water (Figure A).

Figure A

The graph suggests that Chinese annual loan commitments to Africa peaked at close to $80 billion around 2017, using data from AidData. This compared with a peak of around $30 billion using data from Boston University and a peak of $14 bn around 2011 for the World Bank’s International Debt Statistics (IDS). 

The Economist implied that Boston University and the World Bank were underestimating China’s lending commitments in Africa because they were not shining their light in all the dark corners: specifically, they were not including all Chinese creditors and all kinds of loans. But instead, it appears to be The Economist that needs a better flashlight. 

As Chinese-loan-data-geeks, my Cornell University colleague Yufan Huang and I are very familiar with the World Bank’s IDS, AidData, and (of course) Boston University. We spent a good part of Sunday and Monday trying to replicate the numbers in The Economist’s chart. 

Here’s what we found. 

• We guessed from the shape of the World Bank data curve that The Economist was only selecting “official” Chinese creditors, and not “private”. Yet many African countries (like Angola) report China Development Bank loans to the World Bank as “private”. [That data is in the IDS, but analysts need to select "official" and "private".] 

• Working on that hunch, we were able to replicate the curve of the World Bank’s data using “official”, but not the amounts (Figure B). 

Figure B

• What the Economists’ graph shows as $20 bn, should actually be labeled $10 bn. The data labels on the right axis are off by 100% for the World Bank data but, strangely, this is not the case for the Boston University data. 

• When we added “private” Chinese loan commitments to the World Bank data (Figure C), we were able to bring the curve much closer to the Boston University curve. [Boston University includes all Chinese creditors, official and "private", that make loan commitments to African governments and their state-owned companies.] 

• But the big problem came when we tried to replicate the AidData figures. 

• BU, World Bank, and AidData have a few minor methodological differences.* But as Figures B & C show, the data from all three is actually quite similar** once we tried to replicate, correctly, what The Economist said it was trying to show in its graph. 

Figure C

A. Syndicated Loans. Boston University follows the World Bank’s International Debt Statistics reporting protocol. The World Bank asks countries to report syndicated loans, record the lead bank, and report “whether the syndicate comprises institutions of only one or of several countries.” If Chinese banks are part of an international syndicate with other multinational banks, this does not show up as a Chinese loan in either source. AidData does include these loans. Their methodology “assumes that each bank provided equal contributions to the syndicated loan” and they include the Chinese portion in their data.