Now China a top aid donor to poor countries

Wednesday April 20 2016

President Uhuru Kenyatta with his China counterpart Xi Jinping lead their delegations for bilateral talks in South Africa last year. China has significantly increased its financial aid to Kenya and other developing countries, making it by far the biggest new aid donor to some of the world’s poor countries, according to a report by the Overseas Development Institute. PHOTO | PSCU

President Uhuru Kenyatta with his China counterpart Xi Jinping lead their delegations for bilateral talks in South Africa last year. China has significantly increased its financial aid to Kenya and other developing countries, making it by far the biggest new aid donor to some of the world’s poor countries, according to a report by the Overseas Development Institute. PHOTO | PSCU 

By NGARE KARIUKI
More by this Author

China has significantly increased its financial aid to Kenya and other developing countries, making it by far the biggest new aid donor to some of the world’s poor countries, says a new report.

With traditional donors attaching more stringent conditions to their aid, China has come to the rescue of poor countries.

It offers generous aid without conditions on how the money is spent.

Kenya, Cambodia, Ethiopia, Ghana, Lao PDR, Senegal, Uganda, Vietnam and Zambia are some of the countries where a significant rise in Chinese aid was noted in the report by the Overseas Development Institute.

According to the document, China accounts for an average of more than 50 per cent of all flows beyond traditional official development assistance across the nine lower income and lower middle income countries studied.

In three of these countries (Cambodia, Ghana and Lao PDR), Chinese donations accounted for more than 70 per cent of the aid they received.

But this does not mean that all terms and conditions have been thrown out of the window for the happy recipients, as evidenced by aid patterns in the countries that are critical of China.

For instance, countries that have experienced strained relations with China, such as Vietnam and Senegal, receive much less of its finance.

“Our research suggests funds from China go to those countries it favours at a geopolitical level, with those that have experienced tense diplomatic relations receiving much less,” says the report released on Tuesday.

Annalisa Prizzon, a research fellow at ODI and an author of the report, said: “China’s emergence as a dominant player in the new aid landscape could be key to helping poorer countries.”

The report suggests the rise of China as a development finance provider has strengthened the negotiating power of some developing countries with traditional donors.