Global rating firm Moody's Investor Service has released a report showing that Kenya is among countries at the highest risk of losing strategic assets to China over the pile of debt it owes the Asian country.
“Countries rich in natural resources, like Angola, Zambia, and the Republic of the Congo, or with strategically important infrastructure, like ports or railways such as Kenya, are most vulnerable to the risk of losing control over important assets in negotiations with Chinese creditors,” says the report.
China has previously got land in exchange for some debt relief in Tajikistan and took control of the Hambantota Port in Sri Lanka.
According to data from the National Treasury show that we owe the Chinese about Ksh. 554.88 billion or 73.4% of the total bilateral debt of Ksh. 756.28 billion as of Septemeber this year with most of the money being linked to the construction of the SGR.
The agency also adds that Chinese loans also come with relaxed conditions such as no call for structural reforms to enhance governance and competitiveness and in the process jeopardizing the longer-term growth benefits from such loans.
According to the report by Moody's, Chinese lending to African countries increased to more than $10 billion annually between 2012 and 2017, from less than $1 billion in 2002.
Angola (30%), Ethiopia (10%) and Kenya (7%) received close to half of all Chinese investment on the continent between 2000 and 2017.