Kenya is staring at a debt crisis as Chinese loans begin to mature. – By Henry Kimoli.
Consequently, tax payers will commence double digit billion payments to Export Import (Exim) Bank of China.
Kenya’s new standard gauge railway incurred a loss of US$200 million between May 2017 and May 2020.
At the same time, the Kenyan government was contractually obliged to pay almost US$30 million every quarter in fees to Chinese-owned Afristar for the operation of the railway.
The lender, China’s overseas predator per excellence, has mortgaged several African countries such as Zambia, Ethiopia, Tanzania and South Africa to the ground.
Kenya is facing a similar direction and dilema…with Mombasa port title reportedly surrendered as part of the loan collateral to China.
Loans… and More loans
The government has faced a torrid time over the loan situation, amid concerns that the economy risks going burst.
Kenya’s public debt stood at Ksh.1.3 trillion in 2009, but has climbed to Ksh.7.1 trillion as of September 2020.
Civilians have raised concern on the country’s ability to keep the debt level at bay, even after Treasury Ministry was linked to a bid to raise the Debt ceiling to Ksh. 12 Trillion.
Treasury Cabinet Secretary Ukur Yatani said the need for more debt funding will keep the lights on for the economy.
“We have had no choice. This are circumstances we never planned for. For us to be now judged negatively for borrowing under this framework is not fair. We have a responsibility to the people. First is to save lives then prevent the economy from crashing. We can look at the debt issue at another time,” CS Yatani was quoted during the National Assembly Finance and National Planning Committee on December 1.
