Africa’s Debt Paradox: Repayments to China Now Exceed New Borrowing, Data Reveals

Debt flows between continents just flipped—and the numbers tell a surprising story.

The Repayment Tipping Point

For years, headlines screamed about Africa's mounting debt to China. The narrative was simple: loans for infrastructure, paid back over decades. But fresh data pulls a sharp U-turn. The capital pipeline has reversed. More money is now flowing from African treasuries back to Chinese creditors than coming in as new loans. It's a net negative flow—a quiet milestone with roaring implications.

Beyond the Infrastructure Narrative

This isn't just about roads and ports maturing. It signals a shift in the fundamental financial relationship. The era of easy, large-scale lending might be cooling off, replaced by a phase of servicing and settlement. African economies are now channeling foreign exchange to meet obligations, a pressure point for national reserves. Some see it as fiscal responsibility; others spot a liquidity squeeze in the making—a classic case of the bill coming due while new investment taps tighten.

The Ripple Effect on Global Finance

Watch this space. Sovereign debt dynamics are a core driver of currency stability and foreign investment appetite. As repayments drain hard currency from local markets, it could fuel demand for alternative settlement rails—the kind that bypass traditional FX bottlenecks. Think digital assets, currency swaps, or even commodity-backed deals that cut out the dollar middleman. It's the sort of stress that accelerates financial innovation, for better or worse.

A Cynical Take from the Finance Trenches

Let's be real: the original loans weren't charity. They were strategic capital deployed for long-term influence and resource access. Now the collection phase begins. It's Finance 101—debt is a tool of control, not just construction. The real power isn't in issuing the loan; it's in holding the repayment schedule.

The balance sheet doesn't lie. Africa is now a net exporter of capital to China. That reshapes everything from trade negotiations to monetary policy. One continent's repayment is another's balance sheet win—and a stark lesson in the long game of international finance. The construction cranes might slow, but the ledger entries are just getting started.

African nations experience net outflows from Chinese lending

ONE Data analysis released on January 27 found that African countries are now sending more money to China in debt repayments than they get in new loans.

The analysis revealed that Africa experienced the greatest impact in 2020–24, the most recent period for which data are available, with a $30 billion inflow from 2015–19 turning into a $22 billion outflow. “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.

Many African governments are under increasing pressure to finance public services while relying less on external assistance as multilateral organizations step up funding. ONE Data analysis found that these multilateral institutions, such as the World Bank, now account for 56% of net flows, up from 28% ten years ago. Over this time, they have raised finance by 124%.

Cuts implemented in 2025 are not included in the data. David McNair stated that developing economies, particularly in Africa, have already been impacted by the closing of the U.S. Agency for International Development last year and a decrease in funding from other affluent nations.

McNair went on to say that official development assistance flows are expected to decline once data from 2025 becomes available in greater detail.

The research also noted a broader decline in private foreign debt and bilateral finance flows, both of which are expected to worsen with aid cuts starting in 2025. ONE Data revealed that long-term foreign debt from private sources, both public and publicly guaranteed, decreased from 19% of net flows to 1%. In the last five years, this kind of debt has dropped from $115 billion in net new resources between 2010 and 2014 to $7.3 billion.

African countries struggle under mounting public debt

African nations’ mounting debt to China and world lenders reflects the increasing fiscal strain on them. Between 2015 and 2024, African nations saw their average debt-to-GDP ratio climb from 44.4% to 66.7%. Lower public revenues and successive global crises drove this surge. 

Over this period, Angola led African countries with the largest debt to China, at $21.0 billion, followed by Ethiopia at $6.8 billion, Kenya at $6.7 billion, Zambia at $6.1 billion, and Nigeria at $4.3 billion. Beyond these countries, others such as Egypt, South Africa, Cameroon, and Côte d’Ivoire also have large loans, demonstrating a broader trend across the continent in which China continues to be a significant creditor.

This broader pattern is reflected in Kenya’s overall debt situation. As of June 2025, Kenya’s public debt stood at 11.81 trillion shillings ($91.3 billion). According to Kenya’s Finance Minister John Mbadi, the debt-to-GDP ratio was 63.7% in net present value terms, which is regarded as sustainable but carries a higher risk of hardship.

Of the total debt, Mbadi revealed that 5.48 trillion shillings, or $42.38 billion USD, was external debt owed to creditors and development partners such as the World Bank, the African Development Bank, and China.

In the fiscal year 2024–2025, the government spent 1.72 trillion shillings ($13.3 billion USD) on debt payments. It paid 579 billion shillings ($4.48 billion USD) to foreign creditors and 1.14 trillion shillings ($8.81 billion USD) to domestic lenders.

In November 2024, the International Monetary Fund (IMF) stated that Kenya’s debt was still manageable but fragile. Due to sluggish fiscal restructuring, it issued a warning about the serious dangers posed by excessive debt across both external and total public debt.

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