The common phrase among many Kenyans and which the political class does not want to hear about is that Kenya stopped been a working nation, became a walking nation and now it is officially a borrowing nation.
Word has it that Kenya might be losing her port in Mombasa to the Chinese over the ever-skyrocketing debt with the inability to pay back on time.
The government has, however, disputed that there is no way China will take over the Port of Mombasa over debts but as well all know, in Kenya, a rumor and the truth are sons of the same father.
Kenya’s public debt has skyrocketed beyond proportion and organizations such as International Monetary Fund (IMF) warning that if the country cannot shield its borrowing appetite, the debt might become too much to pay.
Kenya’s public debt has now surpassed the 5 trillion shilling mark, more than 60 percent of the country’s Gross Domestic Product (GDP) further raising questions over Kenya’s borrowing binge and how the proceeds of these loans will impact the general economy.
One of the major projects that Kenya has borrowed to finance is the much-talked-about Standard Gauge Railway (SGR) with more than 320 billion shillings having been pumped in. All the loan came from China with the common narrative being that the SGR will pay for itself.
It, however, emerged that in one year of being in operation, the Madaraka Express, the train that operates between Mombasa and Nairobi, only managed to bring in 1 billion shillings in revenues. This is not to mention that the same SGR ‘eats’ 1 billion shillings taxpayers’ money every money, an equivalent to 31 million shillings daily.
It is now emerging that China is Kenya’s largest lender with the country accounting for 72 percent of all the foreign debts in Kenya. According to a piece published by the Business Daily, from the documents gotten from the National Treasury, China’s loans to Kenya had increased by 453 billion shillings from 2014 to 534 billion shillings by the end of March 2018.
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.