China is set to give 23 countries debt forgiveness. Kenya, which has a significant debt from China is not among these countries.
It has now emerged that China locked Kenya out of this list because Kenya is currently ranked as a middle-income country and not a poor country. This implies that Kenya has the ability to service all of its current debt that it owes China.
“State Councillor and Foreign minister Wang Yi mentioned during his remarks at the coordinators’ meeting on the Implementation of the Follow-up Actions of the Eighth Ministerial Conference of the Forum on China-Africa Cooperation that China will waive the 23 interest-free loans for 17 African countries that had matured by the end of 2021,” the Chinese embassy in Nairobi told the media.
Amount of bank loans defaulted by Kenyans cross half a trillion shillings
The Chinese embassy further said that the African countries mentioned in the list referred to the least developed countries. “As a result, Kenya is not on this list,” the embassy said.
Currently, one third of Kenya’s external debt is owed to China. Among this debt is the multi-billion debt Kenya got to finance the Standard Gauge Railway project that was terminated in Naivasha over what China cited as Kenya’s inability to prove value for the project.
Kenya joined the league of the world’s lower middle-income nations in 2014. This was after it crossed the United Nations’ $1,045 gross domestic product (GDP) per capita threshold after rebasing its economy.
The debt relief to the 23 countries was announced on Aug. 18 in an address to Chinese and African diplomats at a follow-up meeting on the Forum on China-Africa Cooperation that was held last November in Senegal.
At the same forum last year, China reduced its pledge to Africa by 33 per cent in an apparent show of concern for Africa’s indebtedness to it and against the backdrop of slowing Chinese economic growth.
