This archive report was first published on 18 June 2020.
Chinese President Xi Jinping has offered a lifeline to African heads of state, including Kenya's Uhuru Kenyatta, during a video call on June 17. The move is part of China's efforts to cushion African countries from the dire effects of the novel coronavirus.
According to a report by Kenya Digest, Xi has pledged to cancel interest-free debts for what he termed as 'relevant countries'. This includes Kenya, which owes China over Ksh530 billion in debt, with the African continent owing China Ksh14.5 trillion.
Xi stated that within the FOCAC framework, China will cancel the debt of relevant African countries in the form of interest-free government loans that are due to mature by the end of 2020. He also disclosed that China will work with the global community to give greater support to African countries hardest hit by the coronavirus, by extending the period of debt suspension.
Kenya had previously rejected a Ksh 3 trillion debt relief package offered by the G20 nations on May 15. Treasury Cabinet Secretary Ukur Yattani argued that the deal limited access to international capital markets for the period of the relief, and could derail the country's ability to finance the deficit later on.
On June 10, Yattani disclosed that Kenya was in talks with China for new debt relief. The country is set to spend Ksh 904.7 billion on servicing debt in the 2020/2021 budget, with debt repayment surpassing development expenditure by Ksh 356 billion.
Xi's move is part of China's efforts to mitigate the economic impact of the COVID-19 pandemic on Africa. The pandemic has put a significant strain on African economies, with many countries struggling to service their debts.
