Kenya Risks Losing Its Port to the Chinese over Increasing Debt

Thomas Jefferson once said, … “‎We must make our choice between economy and liberty or confusion and servitude…If we run into such debts, we must be taxed in our meat and drink, in our necessities and comforts, in our labor and in our amusements…if we can prevent the government from wasting the labor of the people, under the pretense of caring for them, they will be happy.” His words ring trues, decades later.

The labor of the people of Kenya is at stake. Their blood and sweat are at stake because of the careless and petty spending and looting of their gains by a government that is at the behest of greed, bribery, and corruption.

By Justice, a King gives a country stability, but those who are greedy for bribes, tear it down. These deep and reflective words are found in the Holy Bible in the book of Proverbs 29; 4 and they do reflect the relationship between the leadership of the country and how her resources are being managed by those in charge.

Globally, Kenya is ranked at number 78 out of 137 countries by World Economic Forum global competitive index. This means we are barely holding up in the league of average in terms of doing business and creating the needed environment for businesses to grow.

Kenya’s debt: Out of Control

The country’s gross public debt currently stands at Sh4.04 trillion – equivalent to 52.6 percent of GDP – according to latest data from the Treasury. This, in essence, is past the threshold of being prudent and outright risky should we hit more turbulent winds that will derail our projected economic growth.

Financial institutions such as World Bank, IMF and Kenya Institute for Public Policy Research and Analysis (Kippra) have warned Kenya that Treasury should go slow on its borrowing spree, both local and international lest we risk crossing the tipping point and start borrowing from Paul to pay peter. Unfortunately, these sound advice seem to be falling on deaf ears as the appetite for borrowing seems to be growing 100 fold every day.

Jan Mikkelsen, IMF representative to Kenya said… “The fiscal deficit needs to be reduced a little bit to make more room for the private sector and also to reduce the public debt pressure,” While debts are not necessarily bad and can actually be good for growth should they be used for primarily be used for development and not requirement expenditures. Unfortunately seems like in Kenya, we get into debt to loot, plunder, embezzle and pay inflated salaries and pay accrued high interests.

The unfortunate bit about Kenya is seeking debt to finance white elephant projects that do not translate into real, sustainable jobs that have a lasting impact on the people of Kenya and the economy at large. Most of the projects will take at least 100 years to have any significant impact on the economy.

China: Using ‘debt book diplomacy’ to spread its strategic aims in the Asia Pacific

A new report says China’s massive plan to pump hundreds of billions of dollars into ports, rail lines and other projects across Asia, Europe and Africa could pile debt problems onto smaller countries. Countries with weak leadership, poor investment plans and lack of accountability on its public resource spending and a police hold on its citizenry.

US analysts say that loans from China’s Belt and Road Initiative will significantly add to the risk of debt distress for the majority of the countries under the crosshair of the Chinese, with eight countries, including Pakistan, Montenegro, and Djibouti, according to a report published by the Center for Global Development.

“Belt and Road provide something that countries desperately want — financing for infrastructure. But when it comes to this type of lending, there can be too much of a good thing,” John Hurley, a visiting fellow at the center and co-author of the study, said in a statement

Most of the loans are being given out as part of China’s signature Belt and Road infrastructure program, which gives loans to developing nations to fund ports, railways and other initiatives across Asia, Europe, and Africa. Chinas agenda is clear, dominate key trade routes on land and sea and outdo the US in global trade influence and they have picked on countries with corrupt, weak and bribable leadership, zero accountability requirements and nil ability to repay back the loans. Here is where my worry for Kenya comes in and why this Uhuru led administration is the worst in the history of this country.