The economics of China’s Belt and Road Initiative in Africa: debt dependency and development finance. assessing financial risk and geopolitical influence in key African states

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School of Business | Bachelor's thesis
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Date

2025

Department

Mikkelin kampus

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Mcode

Degree programme

(Mikkeli) Bachelor’s Program in International Business

Language

en

Pages

49 + 5

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Abstract

This research investigates China’s Belt and Road Initiative (BRI), focusing on its economic impact across the African continent. The aim of the study is to assess the extent to which African countries are financially dependent on Chinese loans, and to evaluate the sectoral distribution and economic implications of major BRI-funded development projects. This is achieved through a qualitative-dominant mixed-methods approach, combining secondary data analysis with a critical literature review. The findings highlight the uneven distribution of Chinese loans across African states, with countries like Angola, Djibouti, and Zambia exhibiting higher debt exposure and repayment vulnerability. In terms of sectoral focus, BRI lending is heavily concentrated in energy and transportation, often producing significant infrastructure but mixed economic returns. Flagship projects such as the Standard Gauge Railway in Kenya and the Caculo Cabaça hydropower plant in Angola illustrate both the developmental potential and fiscal risks associated with China’s financing model. The research concludes that while Chinese lending has enabled rapid infrastructure growth, its longterm effectiveness depends on local economic conditions, governance capacity, project performance, and strategic positioning. These findings offer valuable implications for international business and global geopolitics, particularly in contexts where infrastructure finance–often guided by major institutions like the World Bank and the IMF–intersects with strategic cross-national influence.

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Thesis advisor

Rannikko, Heikki

Keywords

belt and road initiative, debt dependency, China-Africa relations, infrastructure finance

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https://urn.fi/URN:NBN:fi:aalto-202505113570

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[kand] Kauppakorkeakoulu / BIZ (Open Access)