This archive report was first published on 18 June 2020.
On June 17, 2020, Chinese President Xi Jinping made a significant announcement during a video call with African heads of state, including Kenya's Uhuru Kenyatta.
As part of the Forum on China-Africa Cooperation (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.
According to a report, Xi stated, "For those African countries that are hardest hit by the coronavirus and are under heavy financial stress, China will work with the global community to give them greater support, by such means as further extending the period of debt suspension, to help them tide over the current difficulty."
Kenya, which owes China over Ksh530 billion in debt, is among the countries that will benefit from this move. The African continent owes China a total of Ksh14.5 trillion.
China's announcement comes after the country delayed loan repayments for 77 low-income countries as part of the G20 nations debt relief program on June 8, 2020.
Kenya had previously rejected a Ksh3 trillion debt relief package offered by the G20 on May 15, 2020, citing concerns that the deal would limit access to international capital markets and derail the country's ability to finance its deficit.
Kenya is set to spend Ksh 904.7 billion on servicing debt in the 2020/2021 budget, with debt repayment expected to surpass development expenditure by Ksh 356 billion.
