China's policy of extending loans to impoverished nations in Africa as a means to secure natural resources contracts has drawn considerable scrutiny. In November, 2006, Beijing pledged $5 billion in preferential loans and buyers credits, and most recently
at a June meeting of the African Development Bank, unveiled a $20 billion loan package. China’s approach has drawn criticism from the international development community, which argues that it places already heavily-indebted countries further in debt, and undermines
debt forgiveness efforts. According to the World Bank, debts of 27 Highly Impoverished Poor Countries (HIPC
) declined from $80bn to $28bn since the program's inception in 1996.
While policymakers debate the propriety of this strategy, the controversy underscores an emerging opportunity for financial services companies. Africa is increasingly of strategic importance to the United States and the West, and calls for aid and intervention
have reached a fever pitch. But sustainable economic reforms are only possible with sound financial systems which ensure connectivity to the global economy. We believe that a significant opportunity exists in the design and implementation of financial systems
crucial to credit access, orderly capital flows and liquid financial markets in African economies. For a comprehensive account of the the state of African financial development, see the World Bank's
Making Finance Work for Africa