Kenya President Uhuru Kenyatta and China President Xi Jinping
Kenyan total debt to China has risen to over Ksh. 479 billion according to latest report by Kenya National Bureau of Statistics (KNBS).
The debt attributed to Kenya’s partnership with China in construction of Standard Gauge Railway (SGR) line and it is predicted to increase even further as the SGR enters its second phase.
There is a growing concern over government’s huge Chinese loans. Although the second leading economy nation promised to cancel debts to some African countries it can also take serious steps on failure of repayment.
During the China-Africa summit, President Xi Jinping assured African leaders China was ready to support the continent not just with an additional Ksh. 6 trillion investment but also by writing off loans for poor African economies struggling with huge foreign loans.
Two weeks back China wrote off Ksh. 740 million loan it had extended to Botswana and agreed to give the country another loan for its rail and infrastructure development projects.
Sri-Lanka was in December 2017 forced to hand over Hambantota port to China after failing to pay Chinese loan estimated at more than Ksh. 800 billion, according to a report by the New York Times.
This places the country’s future at dilemma if the government will continue borrowing huge loans from China.
China controls 66 percent of Kenya’s total bilateral debt which stood at Ksh. 722.6 billion as at June 2017.