Organization: Habitat for Humanity
Location: Lusaka, Zambia
Friends with Benefits: Chinese Development Finance in Zambia
Over the past decade, China has solidified its role as a development financier. However, to date there remains a gap in the understanding of Chinese finance, its methodology and the extent of its funding to Africa. This Major Research Paper (MRP) analyzes Chinese finance in Africa with a particular focus on Zambia. First, it distinguishes between finance and aid—a concept often misconstrued in literature. Rather than focusing solely on the amount of finance China is providing to Zambia, this paper places emphasis on Zambia’s attraction to this finance vis-à-vis traditional donor and international financial institutional (IFIs) aid. Through case studies, the types of finance available and the associated risks are also identified and examined. During the course of my research, it was established that although Chinese finance is useful and attractive to the Republic of Zambia, it is mainly focused on infrastructure development as opposed to social and political development. Thus it remains complimentary to traditional sources of finance. Additionally, although existing literature suggests that China provides finance in Africa in exchange for resources, the Zambian case suggests otherwise.