'We give loans to help,' China dismisses claims of overburdening Kenya with debt

The Chinese government has come out to address claims that it is overburdening Kenya with debts that would become a challenge to repay. 

Chinese Ambassador to Kenya Dr Zhou Pingjian has, however, dismissed the reports insisting that China is only offering loans to Kenya to spur its development and they have no hidden agenda.

“All the loans from China are project-specific based on equal-footed consultation and mutually beneficial cooperation. The fruitful and tangible outcomes of our cooperation are solid there for all to see,” the ambassador said.

“China-Africa financing co-operation always follows customary business practices and respects African countries’ sovereignty, will and domestic legal procedures. There is no interference or covert manoeuvre,” he added.

According to Dr Zhou, the Chinese debt to Kenya is meant to advance economic growth, generate more tax revenues, and increase exports and earn foreign exchange for an improved balance of payments.

He said that the loans are issued in good faith and it is upon Kenya or any other African countries that acquire them to put them to good use.

The envoy further refuted claims that China is the biggest creditor to Kenya. He noted that Chinese loans to Kenya only account for 10% of its foreign loan.

He noted that the biggest leaders to Kenya and other African nations are the Western creditors that he says account for three-quarters of the continent’s debt.

“Kenya’s largest creditor? Not China. Kenya owes less than 10% of its public debt, or, less than 20% of its foreign debt, to Chinese creditors. Labelling China as the main creditor of Kenya is an overstatement,” Dr Zhou said.

“Western investors, often in the forms of multilateral financial institutions and commercial creditors, are the largest creditors of African countries such as Kenya. According to the World Bank’s 2022 International Debt Statistics, 28.8% of Africa’s external debt comes from multilateral financial institutions and 41.8% from commercial creditors. Together they account for nearly three-fourths of Africa’s total debt.”