China's slowing economy could result in a further drop in its lending to sub-Saharan Africa, a new report by the International Monetary Fund said.     

The cutback marks a shift away from big ticket infrastructure financing, as several African countries struggle with escalating public debt, the report said.

Chinese loans to Africa fell below $1 billion last year, the lowest level in nearly two decades, it said.     

"The country’s economic engagement with the region is evolving, with implications for growth, trade, and investment," the report by Hany Abdel-Latif, Wenjie Chen, Michele Fornino and Henry Rawlings, said in the IMF report.

China has forged deep economic ties with countries in Sub-Saharan Africa over the past 20 years, making it the region's largest single country trading partner, the report said.     

China buys one-fifth of the region’s exports from metals, minerals, and fuel and provides most of the manufactured goods and machinery imported by African countries.

However, China’s recovery from the pandemic has slowed recently due to a property downturn and flagging demand for its manufactured goods as global growth has also slowed.

The IMF cut its growth predictions for China in October, citing a real estate crisis looming over the world's No. 2 economy.
A one percentage point decline in China’s growth rate could reduce average growth in Sub-Saharan Africa by about 0.25 percentage points within a year, the IMF report said.     

For oil-exporters, such as Angola and Nigeria, the loss could be 0.5 percentage points on average.   

Sub-Saharan African countries will need to adapt to China’s growth slowdown, and declining economic ties by taking measures such as increasing inter-African trade, the report noted.

(Editing by Seban Scaria seban.scaria@lseg.com )