Revenue earned from engineering and construction works in Africa by Chinese firms has dropped by 31 per cent since the peak of lending in 2015, presumably due to factors that include a more conservative approach from lenders and a falling number of projects.
Engineering and construction contracts in Africa earned Chinese companies 37.84 billion dollars in gross annual revenues in 2022, down 31% from the 54.78 billion dollars generated in 2015, when lending to Africa peaked, according to data from the China-Africa Research Initiative (CARI) at the Johns Hopkins University School of Advanced International Studies.
Africa made up 19,4% Chinese companies’ global revenue in 2022, almost half of its peak of 38,9 per cent in 2010, with an estimation of over 10.000 Chinese state-owned and private companies currently operating in Africa, excluding small businesses.
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Between 2000 and 2022, China pledged a total of 170.1 billion to African countries, which were invested in the construction of mega projects, including ports, hydroelectric dams, highways and railways, as Africa continues to be especially attractive to companies in sectors that have faced a crisis in the Chinese domestic market, such as construction and infrastructure.
China’s highest African revenues were gained from the five resource-rich countries of Nigeria, Angola, Algeria, Egypt and the Democratic Republic of the Congo, accounting, altogether, for 41 per cent of all Chinese companies’ 2022 gross annual revenues from construction projects in Africa.
Angola accounted for more than a quarter of China’s total loans in Africa between 2000 and 2022, receiving up to 45 billion dollars, and with the presence of a major Chinese project, worth 4.1 billion dollars, the Caculo Cabaça Hydroelectric Power Plant.
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Thus, despite the reduction in revenue, Africa continues to be a pole of attraction for Chinese companies, with higher returns for Chinese companies, partly due to the lack of competition in bidding for projects financed by China, since Chinese contractors help broker loans from China, companies can get better returns.
