Poverty alleviation in Africa: The Impact of China's Aid

Foreign assistance is increasingly a catalyst for change, and it is helping to create conditions in which poor people are able to raise their incomes and to live longer, healthier, and more productive lives. One of the prominent features of Africa’s economic development is its growing partnership with China. While the new partnership has had a positive impact on growth, this paper argues that more needs to be done by both China and African governments to enhance the impact of Chinese development finance in Africa. Against this backdrop, it identifies ways in which Chinese development finance could be used to foster trans-formative growth and development in Africa. The paper also stresses that the responsibility for Africa’s development rests primarily with African governments and that China can only play a supporting role. In this context, it underscores the need for African countries to be proactive in their partnership with China to ensure that their development needs are effectively addressed. The paper is organized as follows: section one focuses on trends, patterns, and features of Chinese development finance in Africa, with emphasis on aid, FDI, and debt. Section 2 discusses fundamental differences between Chinese development finance and those of member states of the Organization for Economic Cooperation and Development (OECD). Section 3 examines and analyses the impact of Chinese development finance in Africa and also highlights some of the emerging challenges associated with the new partnerships. Section 4 focuses on how to make Chinese development finance work better for Africa and identifies policy measures that should be taken by both China and African countries to achieve this objective. The final section contains some concluding remarks