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No Kenyan asset has been mortgaged for SGR loan, Chinese envoy says

By Roselyne Obala | May 22nd 2019

China has denied claims that its policies towards Africa and especially Kenya are a "debt trap" owing to the numerous major projects initiated.

Yesterday, the new Chinese Ambassador to Kenya Wu Peng downplayed the concerns and said there were no collaterals attached to the loans secured by the Jubilee administration since 2013.

“No country has been trapped in a debt crisis due to its cooperation with China. There are no secret clauses in the deals with Kenya,” he said.

“I can assure you that any loan agreements between China and Kenya are in line with common international best practice. None of Kenya’s national assets has been mortgaged for the SGR loan, neither will any asset be seized nor controlled by China, even in a situation of default.”

He went on: “I have personally engaged the companies and banks in Beijing and there is nothing to that effect.”

Asked if he could make public the contracts between Kenya and China, the envoy explained that he was bound by the rules of his country just like the President’s Chief of Staff Waita Nzioka affirmed that the same would not be provided from the Kenyan side.

“As much as I support transparency, there are obstacles to the contracts being made public. We have state-owned banks and company banks. There are the commercial interests which are protected,” he said.

Mr Wu said every country has its legal procedure to obtain information.

He addressed the contentious issue surrounding the stalled extension of the Standard Gauge Railway (SGR) from Naivasha to Kisumu, emphasising the issue of financial viability.

“I can confirm that funding for Naivasha-Kisumu SGR was not on the agenda of presidents Uhuru Kenyatta and Xi Jinping's meeting in Beijing,” he clarified.

He said the Kenyan Government was now focusing on the operations of the Mombasa-Nairobi SGR to maximise its effects, "which I believe is a smart and responsible decision".

“China fully respects Kenya's decision on when to start Naivasha-Kisumu SGR line. Indeed, Rome was not built in a day," he said.

"China supports Kenya’s efforts to improve its infrastructural connectivity, which is key to economic development."

He affirmed China would work closely with Kenya in undertaking infrastructure projects, based on economic viability.

Wu, who was speaking during a Press Club luncheon organised by the Kenya Editors Guild, said that though his government was committed to fostering the comprehensive strategic cooperative partnership, Kenya had opted for the Meter Gauge Railway for now.

“I know at some point they will want the SGR. The Government has priorities,” he said.

He argued that huge infrastructural projects like SGR may take long to yield returns, but they are solid and valid assets.

“China attaches high importance to debt sustainability. Before making decisions, Chinese companies and banks, even the third party, go through rigorous feasibility studies, and review of a country’s credit rating."

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