China now controls 66 per cent of Kenyaâ€™s bilateral debt
SEE ALSO :Chinese pump Sh100m into projectsChina’s debt stock is almost certain to increase further this year as construction of the Standard Gauge Railway (SGR) enters its second phase, with Kenya said to have borrowed a further Sh165 billion for the extension of the railway line from Nairobi to Naivasha. Kenya, which spent over Sh440 billion on SGR from Mombasa to Nairobi, is expected to pump a total of Sh1 trillion into the railway by the time it terminates at the border town of Malaba. “In bilateral debt category, the stock of debt from the People’s Republic of China grew by 52.8 per cent to Sh478.6 billion, accounting for 12.1 per cent of the total national government’s debt position,” said the Kenya National Bureau of Statistics in its 2018 Economic Survey. China’s s debt to Kenya has increased more than seven times from Sh63 billion in 2013, overtaking Japan as the country’s leading bilateral lender to Kenya. By 2010, China had lent Kenya a paltry Sh14 billion, trailing Japan (Sh62 billion), France (Sh28 billion), and Germany (Sh16 billion). Japan would continue holding the pole position until 2013, when China deposed it.
SEE ALSO :President Uhuru’s 2019 State visitsThe change was largely driven by China’s increased interest in the development of Kenya’s infrastructure, with the game changer being the construction of the SGR. The new railway’s financing pushed up China’s debt stock from Sh252 billion in 2015 to Sh465 billion in 2016. Debt stock Japan’s loans to Kenya, as at June 2017, stood at Sh91.4 billion, down from Sh94.4 billion a year before, according to the Economic Survey. France, which has lately been also making inroads into the country, is the third largest bilateral lender, having extended to the Kenyan Government loans valued at Sh63.2 billion by last year, up from Sh59.4 billion a year earlier.
SEE ALSO :SMEs reap big from China importsUptake of expensive loans, with short maturity period, has added to the country’s burden of servicing debts, the survey shows. [email protected]
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