Kenya spent Ksh. 33.54 billion to pay back bilateral loans in the year ended June 2019 with most of the amount going to China, data from the national exchequer has revealed.
According to the Treasury, Kenya paid China Ksh. 29.21 billion in the period under review which translates to 87.08 percent of the total interest that the state spent on settling bilateral debt. The figure was 7.5 percent higher than the Ksh. 27.17 billion Kenya spent on repaying Chinese loans a year earlier.
The treasury similarly revealed that China accounted for 66.38 percent of Kenya’s bilateral debt. In the period under review, Kenya took an extra Ksh. 96.53 billion (US$929.46 million) loan from China which increased the East Asian nation’s bilateral debt to Ksh. 671.15 billion (US$ 6.46 billion), highlighting the country’s dependence on China to finance development projects.
The East Asian country has since become the single largest creditor to Kenya, accounting for 11.55 percent of the country’s Ksh.5.81 trillion total debt as at June 2019. Ever since President Uhuru Kenyatta came into office, the country has largely taken loans from China to finance the development of infrastructure such as the Standard Gauge Railway and the Thika Super Highway.
China has however started limiting credit advances to the country, with Nairobi turning to Japan to secure loans. According to the treasury, bilateral loans from Japan increased to Ksh. 136 billion (US$1.3 billion) as of June 2019 up from Ksh. 52.2 (US$503 million) billion registered in a similar period last year.
In the period under review bilateral loans taken from Japan exceeded those taken from China which stood at Ksh. 671 billion. A year earlier loans taken from China stood at Ksh. 569.7 billion (US$5.5 billion). Though significant, the 16 percent jump in Chinese loans in the period is not as high as other years, signaling the Asian country’s decision to reduce lending to African states.