Kenya risks losing port to China casting shadow over India's outreach in Eastern Africa
China is now the single largest financier for infrastructure in Africa, funding one-in-five projects and constructing every third one, according to a Deloitte report. Forty out of Africa’s 55 states, along with African Union have signed memoranda ...
Kenya was one of three African countries identified in a March 2018 report by the Washington-based Center for Global Development as at risk of debt distress as a result of its Belt and Road participation. The others were Egypt and Ethiopia.
Delhi has developed major stakes including defence and economic partnership along the Eastern Coast of Africa including Kenya and Western Indian Ocean Region as part of its Indo-Pacific vision and Chinese controlled port in the vicinity could be detrimental to India’s interests. India has made huge outreach to Eastern and Southern Africa since 2015 and currently expanding presence in Western Africa.
In December 2017, the Sri Lankan government leased its Hambantota port to China for a period of 99 years after failing to show commitment in the payment of billions of dollars in loans. In September 2018, Zambia lost Kenneth Kaunda International Airport to China over debt repayment ringing alarms in other African states.
Kenyan government risks losing the lucrative Mombasa port to China should the country fail to repay huge loans advanced by Chinese lenders, persons familiar with the issue told ET. Also at stake is the Inland Container Depot in Nairobi, which receives and dispatches freight hauled on the new cargo trains from the seaport.
If China takes over the port, thousands of port workers would be forced to work under the Chinese lenders. Further, revenues from the port would be directly sent to China for debt servicing
In the likely scenario that China takes over the port, Kenya would be joining Sri Lanka - another debt-distressed nation - in losing a strategic asset.
The Auditor-General of Kenya has warned that the eventuality is likely because of a lopsided loan agreement that greatly favors the China Exim Bank, who advanced Kenya the loan. Repayments for the loans are slated to start mid next year on the expiry of a five-year grace period.
China is now the single largest financier for infrastructure in Africa, funding one-in-five projects and constructing every third one, according to a Deloitte report. Forty out of Africa’s 55 states, along with African Union have signed memoranda of understanding with Beijing to finance and build modern highways, airports, and railways.
Chinese state-run media repeatedly harped on the Mombasa-Nairobi Standard Gauge Railway (SGR) project as a showcase for President Xi Jinping’s Belt and Road Initiative. The first half of the Kenya-Uganda railway, a 470-kilometer stretch between the port city of Mombasa and Nairobi, is operational but not yet making money.