China sets new loan terms for Kenya, deviating from previous engagements
China has set new loan terms for Kenya following a thorough evaluation of borrowing and utilization requests.
China says that loans to Kenya will only be disbursed on the basis of necessity and will only be given to certain national programs, depending on the country’s capacity to repay the debts.
This is a significant departure from prior loan agreements and confirms that China is actively altering her lending policy in Kenya.
The second-largest economic powerhouse declared that it would take outstanding debt payments into account before approving any more loans to Kenya.
“We are willing to listen, discuss and improve cooperation as equal partners. The Chinese may fit in some programmes so going forward the priority of our cooperation will be decided by the two sides involved,” Chinese Ambassador to Kenya Zhou Pingjiang said.
Kenya is sinking deeper and deeper under the weight of debt, particularly that owed to foreign lenders, whose short-term loans are thought to be more expensive.
However, China is prioritizing development initiatives that are in line with its economic strategy, such as the Belt and Road Initiative (BRI), a massive infrastructure project that spans several African nations, including Kenya.
The new Kenyan administration, which is having trouble finding finance for its important infrastructure projects funded by China, will continue to have a friendly relationship, according to Ambassador Pingjiang.
Chinese fiscal conservatism has witnessed a significant halt in its aggressive lending to Africa in recent months as a result of market unrest and other factors like the epidemic.
Kenya owes China more than Ksh700 billion (nearly $42bn) in total which she used to fund key infrastructural projects, especially during retired President Uhuru Kenyatta’s era.
This China-Kenya new loan terms will definitely place the country on an active capital market in the current and next fiscal year.
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