In 1994, a relatively modest development lender was launched in Beijing with $4.3bn in capital. Within two decades, it had grown into the world’s largest development bank, reshaping how long-term infrastructure and industrial finance could be executed at scale.
The rise of a state-backed giant
The institution in question, the China Development Bank (CDB), was established to channel long-term financing into strategic sectors aligned with national economic planning. Unlike commercial banks focused on short-term returns, CDB specialised in infrastructure, energy, manufacturing and urbanisation projects — often with tenors extending decades.
Its growth was underpinned by three structural advantages: strong state backing, deep domestic capital markets and a clear policy mandate. By issuing bonds domestically at scale and leveraging sovereign credibility, CDB mobilised vast resources without relying solely on fiscal transfers.
Within 20 years, it had financed highways, railways, ports and industrial zones across China, while expanding internationally through overseas infrastructure and energy lending.
Lessons for African banking systems
Africa’s development financing gap remains significant. Infrastructure deficits, energy shortages and SME capital constraints continue to limit growth potential. While commercial banks across the continent are profitable in many markets, balance sheets often prioritise short-term trade finance and consumer lending over long-term project funding.
One lesson from China’s model is the importance of dedicated development mandates. African governments could strengthen or establish specialised policy banks with clearly defined infrastructure and industrial remits, separate from retail-focused institutions.
Second, domestic capital market depth matters. CDB’s ability to issue bonds at scale was critical to its expansion. African economies could prioritise strengthening local currency bond markets, enabling pension funds and insurance pools to finance long-dated infrastructure rather than relying predominantly on foreign currency debt.
Third, coordination between government strategy and financial institutions proved decisive in China’s case. Long-term planning — linking transport corridors, manufacturing clusters and export capacity — created bankable project pipelines. African regional blocs could apply similar coordination across borders, particularly under the African Continental Free Trade Area framework.
Adapting, not copying
However, replication must account for structural differences. China’s centralised governance model differs from Africa’s diverse political and economic landscape. State-backed lending also carries risks, including potential misallocation of capital and rising non-performing loans if projects lack commercial viability.
Transparency, governance safeguards and risk management would therefore be essential in any adaptation of the playbook. Strong regulatory oversight and clear performance metrics could help ensure development banks remain financially sustainable.
Importantly, Africa does not lack financial expertise. The continent hosts sophisticated banking groups with regional footprints and growing technological capabilities. The question is whether capital can be mobilised and directed towards transformative, long-term sectors at scale.
A strategic opportunity
China’s experience demonstrates that development banking, when aligned with national priorities and supported by deep capital markets, can accelerate structural transformation. For African economies seeking industrialisation and infrastructure expansion, the model offers strategic insights — not as a template to copy wholesale, but as a framework to adapt.
If Africa’s banks can combine commercial discipline with long-term developmental vision, the continent’s financial architecture could evolve from transactional intermediation to catalytic transformation. The tools exist. The challenge lies in execution.
Newshub Editorial in Africa – 26 February 2026
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