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This article is more than 11 months old The Nigerian news site is right about Mombasa – Kenya’s auditor general did warn in an audit report for 2017/18 that the country risked losing the Indian Ocean port if it defaulted on Chinese loans. In quoting an Indian business publication, Ventures Africa got its numbers very jumbled. The most recent data puts Kenya’s external debt at US$36.7 billion, and not $50 billion. It owes China $6.92 billion. This is 67% of the country’s total bilateral debt but 19% of the country’s external debt. This is far from the figures quoted by Ventures Africa, of Kenya owing China $50 billion or having to pay the Asian giant’s Exim Bank $60 billion over the next four years. Ahead of Kenyan general elections set for August 2022 , public debt is a concern . Some analysts predict political risk could weigh down efforts to rein in borrowing and narrow the budget deficit. An evergreen topic in Kenya is how much the country owes China. Africa Check has debunked many claims on the subject. In December 2021 Ventures Africa , an online publication based in Nigeria, made three claims about Kenya’s Chinese debt and the consequences of defaulting. We vetted these claims. This also originated from the same Economic Times article as the previous claim – and is even more inaccurate. Kenya does not even owe China that much, said John Kinuthia of the International Budget Partnership . He added that even the total debt of $6.9 billion that Kenya owed China will be paid over a long period, not ‘over the next few years’. Kinuthia shared budget projections for the next four financial years, with details of scheduled repayments of the principal and interest to the country’s creditors. Debt repayment to China’s Exim Bank 2021/22 – 2024/25 Financial year Principal (KSh bn) Interest (KSh bn) 2021/22 73.4 23.3 2022/23 80.5 23.2 2023/24 87.2 22.9 2024/25 91.7 21.9 Total 332.8 91.3 Total projected repayments to the Export-Import Bank of China (Exim Bank) work out to KSh424.1 billion or $3.73 billion from 1 July 2021 to 30 June 2025. Exim is a state-owned and funded bank that supports China’s foreign trade and investment.
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This article is more than 11 months old The Nigerian news site is right about Mombasa – Kenya’s auditor general did warn in an audit report for 2017/18 that the country risked losing the Indian Ocean port if it defaulted on Chinese loans. In quoting an Indian business publication, Ventures Africa got its numbers very jumbled. The most recent data puts Kenya’s external debt at US$36.7 billion, and not $50 billion. It owes China $6.92 billion. This is 67% of the country’s total bilateral debt but 19% of the country’s external debt. This is far from the figures quoted by Ventures Africa, of Kenya owing China $50 billion or having to pay the Asian giant’s Exim Bank $60 billion over the next four years. Ahead of Kenyan general elections set for August 2022 , public debt is a concern . Some analysts predict political risk could weigh down efforts to rein in borrowing and narrow the budget deficit. An evergreen topic in Kenya is how much the country owes China. Africa Check has debunked many claims on the subject. In December 2021 Ventures Africa , an online publication based in Nigeria, made three claims about Kenya’s Chinese debt and the consequences of defaulting. We vetted these claims. We contacted Ventures Africa for the source of this figure, and they sent us a link to an article first published in September 2021 by the Economic Times , an Indian business news platform . The best data to verify this claim was the national treasury , John Kinuthia told Africa Check. He is a senior programme officer with the Kenya office of the International Budget Partnership , a global budget transparency organisation. He directed us to the most recent quarterly economic and budgetary review , covering July to September and published in November 2021. It showed the country’s total external debt at $36.7 billion . Prof Deborah Brautigam is director of the China Africa Research Initiative at Johns Hopkins School of Advanced International Studies in Washington DC in the US. She has written extensively about China in Africa. These figures from the article are not correct, Brautigam said. She suggested we look at World Bank data . This put Kenya’s total external debt at $38 billion. She also cited a Kenya central bank report which showed Kenya owed China $7.1 billion as of 30 June 2021. In 2018, Africa Check found that China owned 21.3% of Kenya’s external debt and 72% of its bilateral debt, or debt loaned by one state to another state. Our most recent fact-check on the subject, published in January 2022, found Kenya owed China $6.92 billion. As a percentage of Kenya’s total bilateral debt this worked out to 66.5% but as a share of external debt it was 18.9%. None of these sources bear out the claim and we therefore rate it incorrect.
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This article is more than 11 months old The Nigerian news site is right about Mombasa – Kenya’s auditor general did warn in an audit report for 2017/18 that the country risked losing the Indian Ocean port if it defaulted on Chinese loans. In quoting an Indian business publication, Ventures Africa got its numbers very jumbled. The most recent data puts Kenya’s external debt at US$36.7 billion, and not $50 billion. It owes China $6.92 billion. This is 67% of the country’s total bilateral debt but 19% of the country’s external debt. This is far from the figures quoted by Ventures Africa, of Kenya owing China $50 billion or having to pay the Asian giant’s Exim Bank $60 billion over the next four years. Ahead of Kenyan general elections set for August 2022 , public debt is a concern . Some analysts predict political risk could weigh down efforts to rein in borrowing and narrow the budget deficit. An evergreen topic in Kenya is how much the country owes China. Africa Check has debunked many claims on the subject. In December 2021 Ventures Africa , an online publication based in Nigeria, made three claims about Kenya’s Chinese debt and the consequences of defaulting. We vetted these claims. We contacted the office of Kenya’s auditor general to ask about this claim. Peter Opiyo, the agency’s deputy director for communications, referred us to its audit report of the Kenya Ports Authority (KPA) for the financial year 2017/18. The authority manages the country’s seaports. The report revealed that KPA’s assets and revenues had expressly guaranteed the repayment of the loan amounting to KSh363.96 billion financing the standard gauge railway. The railway is Kenya’s most expensive infrastructure project. Snaking from Mombasa to Kenya’s capital Nairobi, it was built through Chinese funding. But the actual contract has remained under lock and key, with government officials reportedly saying its disclosure could undermine national security. The audit cited a payment arrangement agreement in which the port authority agreed to irrevocably waive any right of immunity in any proceedings against it or any of its present or future assets. Kenya Ports Authority assets are exposed to risk of takeover by the lender, the auditor general’s report said . The auditor general also pointed out that the agreement was unfavourable to Kenya, because it directs that all unresolved disputes involving the Export-Import Bank of China (Exim) be settled in Beijing, China. Uganda, Kenya’s eastern neighbour, has also seen avid debate about its main airport, should the country default on its debt to China. In response, China has said it has never confiscated a single project in Africa. The claim that Kenya’s auditor general warned the country may lose the Mombasa port in case of default on the Chinese loans is however correct.
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