This archive report was first published on 25 September 2019.
Kenya's reliance on Chinese loans has reached alarming levels, with Beijing accounting for 87.08% of the country's interest payments to bilateral lenders in the year through June 2019.
According to Treasury statistics, interest payments to Chinese State-owned banks accounted for Sh29.21 billion of the Sh33.54 billion total interest spend on bilateral loans, a 7.5% growth over Sh27.17 billion a year earlier.
Kenya's bilateral debt jumped by a third to nearly $9.74 billion (Sh1.01 trillion) in the year ended June, with loans from Japan surging 162% to $1.32 billion (Sh137.29 billion) compared with a year earlier.
China's influence on Kenya's infrastructure development started in earnest with the construction of the Thika Superhighway between January 2009 and November 2012 at a cost of nearly Sh32 billion during the last term of President Mwai Kibaki.
President Uhuru Kenyatta's administration has largely contracted debt from China since 2014 to build new roads, standard gauge railway (SGR), and bridges.
Western powers have raised concerns that Chinese loans are pushing African nations such as Kenya deeper into unsustainable debt, eating up a significant chunk of their revenues and limiting their investments in capital projects that generate jobs for unemployed graduate youth.
“China, as it becomes a major investor, donor, and creditor country, will have to do all others have done: accept that you have to write off some of your debt,” Mukhisa Kituyi, the United Nations Conference on Trade and Development (Unctad) secretary-general, told a forum in Nairobi on September 12.
