Impact of China-Africa aid relations: the case of Sudan

As in most other typically developing and African economies, Sudan’s economy has relied
heavily on a large influx of foreign aid. Since long, there is a significant amount of foreign aid
to Sudan from different sources including the U.S., EU (e.g. the Netherlands, Italy, and
Germany), Arab countries (e.g. Saudi Arabia, Kuwait, and UAE), China, the World Bank,
International Monetary Fund (IMF), United Nations, Arab Fund for Economic and Social
Development and Organization of Petroleum Exporting Countries (OPEC). Since 1970s,
China also started to offer aid and development assistance to Sudan. During the late 1970s
and 1980s the large inflow of foreign aid to Sudan was mainly offered by the International
Monetary Fund (IMF) and the World Bank. Since the mid- 1990s, following the large drop in
the inflow of foreign aid from the traditional western donors, Sudan looked for other
alternative sources of foreign aid and development assistance from the emerging donors,
mainly China. This policy is incidentally consistent with China’s increasing economic
interests in Sudan as a new resources – oil -rich economy.
Consequently, in the last two decades, China has increased foreign aid and
development assistance to Sudan and some other African countries such as Cameroon, DRC,
Ethiopia, Ghana, Mali, Senegal, Togo, Rwanda, Guinea and Uganda. The Chinese aid to
Sudan as in many other resource-rich African countries is essentially motivated and intended
to accomplish broader strategic objectives and achieve mutual interests. For this reason the
share of Sudan, Angola, Mozambique, Nigeria and Zimbabwe represents over 80% of the
total Chinese concessional loans to Sub-Saharan Africa. In Sudan, for example, China
accounted for 58% of total contracted loans and grants over the period (2005-2007)- see Table
5 below. Different from other foreign donors to Sudan, Chinese aid is characterising by
offering little programme aid and mainly focusing on project aid including technical
assistance and training. In addition, the Chinese aid has the relative potential to be utilised in
financing grandiose or prestigious projects and buildings (e.g. presidential palaces, Friendship
Hall, etc.) that are unsupported and perceived as “unproductive” investments by the
traditional donors. In addition the Chinese aid to Sudan is offered with little political
conditionality. But from economic perspective, the effectiveness of the Chinese aid to Sudan
is undermined by the fact that it is typically ‘tied’ to oil, to purchase of Chinese goods and
services and to implementation of the Chinese aid projects by Chinese companies utilizing

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