Does Kenya risk losing port to China?
SEE ALSO :US, China trade debates persistThis saw the Asian giant stretch its lead as the country's largest bilateral lender, with its debt stock increasing by 52.8 per cent to Sh478.6 billion in 2017, from Sh313.1 billion in 2016. The world's second-largest economy now controls 66 per cent of Kenya's total bilateral debt, which stood at Sh722.6 billion as at June 2017. This rivals multinational institutions such as the World Bank and United Nations, whose combined debt stock stood at Sh526.6 billion last year.
China'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.
Page 3 of Auditor General's report. Kenya's port collateral for China loan... pic.twitter.com/ok09sHKd3G— John Githongo (@johngithongo) December 19, 2018
SEE ALSO :The Uhuru-Raila 'secret' visits to China"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," says 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 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. The 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.