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Access to Chinese goodies to depend on State proposals

By | November 12th 2009 at 00:00:00 GMT +0300

By morris Aron

How much Kenya receives out of the Chinese goodie bag for Africa, unveiled recently, will depend on the strength of the proposals presented to the Chinese Government by the various ministries through Treasury.

A senior Treasury official, who asked not to be quoted citing protocol, told The Standard that the political pledge by the Chinese will be followed by proposals from various ministries intending to receive funds.

"How much we receive in the form of loans will depend on the strength of our proposals, strategic interest of the Chinese in the country, and how close our Government is to the Chinese," said the source.

On Sunday at a summit in Egypt, the Chinese Government unveiled a raft of goodies, including a promise to double the amount of loans, to $10 billion (Sh740 billion) over the next three years.

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In addition, Chinese Premiere, Wen Jiabao, said that his country will support Chinese financial institutions in setting up a $1 billion fund(Sh74 billion) for loans to SMEs and cancel more debt.

Though it is not immediately clear how much Kenya stands to gain from the goodie bag, economic analysts say that the mere fact that the Chinese have doubled the loan amounts from what it offered in 2006, is bound to fuel economic growth, seen as the next growth frontier.

At a summit in Beijing in two years ago, President Hu Jintao promised Africa $5 billion loan (Sh370 billion) in infrastructure development, and other forms of assistance.

Kenya has had its share arising from the pledge.

Among the projects include the 50km JKIA-Gigiri road upgrade, underway at a cost of Sh2.16 billion.

There is also $35 million (Sh26 billion) loan to increase electricity transmission in the country, and another Sh700 million for the construction of a second referral hospital in Nairobi’s Kayole Estate.

Diplomatic ties

At the meeting in Egypt over the weekend, the Chinese have proposed to phase in zero-tariff treatment for 95 per cent of products from the least developed African countries with whom China has diplomatic ties.

China will start with 60 per cent of products, at zero-tariff from 2010. In addition, China and Africa will together establish a partnership to respond to climate change, by building 100 clean energy projects in Africa, including solar power, biogas and small-scale hydroelectric power sources.

The Chinese also plan to boost African food security by sending 50 agriculture technology teams to Africa to train 2,000 agricultural technology personnel towards that goal.

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