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China & India as Africa’s new donors: the impact of aid on development

This article attempts to assess the likely impact of Chinese and Indian aid on the development of Africa. The framework treats aid as one of four main channels through which China and India influence the shape and performance of particular sectors and, through them, development outcomes. The first stage of analysis examines the varying patterns of Chinese and Indian aid and the multiple impacts such aid has on one key sector: manufacturing. The second stage of the analysis looks at the implications of Chinese and Indian aid to manufacturing for development outcomes such as growth, distribution, governance and environment. It shows that the potential impact of Chinese and Indian aid on Africa is significant, but that the actual effects of these emerging donors on particular countries depends to a large extent on the institutional and structural conditions of the recipient countries.