{"id":66278,"date":"2022-08-26T13:52:59","date_gmt":"2022-08-26T13:52:59","guid":{"rendered":"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal"},"modified":"2022-08-26T13:56:09","modified_gmt":"2022-08-26T13:56:09","slug":"china-locks-out-kenya-from-new-debt-relief-deal","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal","title":{"rendered":"China locks out Kenya from new debt relief deal"},"content":{"rendered":"

Africa-Press – Kenya. <\/strong><\/span>The elevation of Kenya to the middle-income status saw China lock the country out of a new list of African nations that will receive a Beijing debt relief this year, under a plan by the world\u2019s second-largest economy to help 17 poor states in the continent saddled with its huge loans forego their repayments.<\/p>\n

The deal announced last week will see Beijing forgive 23 matured interest-free loans for 17 unnamed African countries, which are classified as least developed countries.<\/p>\n

Read: Kenya paid China $256m to ease debt repayment standoff: reports<\/p>\n

Beijing made the announcement during the Forum on China-Africa Cooperation that seeks to boost ties between China and its African allies.<\/p>\n

Chinese Foreign minister Wang Yi said at the forum the debt relief plan \u201cdemonstrates China\u2019s commitment to fostering stronger economic ties with the African continent\u201d.<\/p>\n

Chinese authorities in Nairobi said Wednesday Kenya was left out of the deal as it is classified as lower-middle income, which the new Beijing scheme does not apply to.<\/p>\n

Read: Has China pushed African countries into \u201cdebt traps\u201d?<\/p>\n

\u201cState Councillor and Foreign minister Wang Yi mentioned during his remarks at the coordinators\u2019 meeting on the Implementation of the Follow-up Actions of the Eighth Ministerial Conference of the Forum on China-Africa Cooperation that China will waive the 23 interest-free loans for 17 African countries that had matured by the end of 2021,\u201d the Chinese embassy in Nairobi told the Business Daily<\/b>.<\/p>\n

\u201cThe African countries mentioned here refer to the least developed countries. Therefore, Kenya is not on this list,\u201d added the Chinese authorities.<\/p>\n

Kenya, which is East Africa\u2019s largest economy, joined the league of the world\u2019s lower middle-income nations in 2014, having crossed the United Nations\u2019 $1,045 gross domestic product (GDP) per capita threshold after rebasing its economy.<\/p>\n

China, which accounts for about one-third of Kenya\u2019s 2021-22 external debt service costs, is the nation\u2019s biggest foreign creditor after the World Bank.<\/p>\n

Kenya planned to spend a total of Sh117.7 billion on Chinese debt in the period, of which about Sh24.7 billion is in interest payments and almost Sh93 billion in redemptions, according to budget documents.<\/p>\n

Kenya faced a deteriorating cash-flow situation, marked by falling revenues, worsening debt service obligations, and the effects of the Covid-19 pandemic. The debt burden has recently been compounded by the economic turmoil unleashed by the war in Ukraine but Kenya has never defaulted on its obligations.<\/p>\n

Kenya last year asked for an extension of the debt repayment moratorium from bilateral lenders, including China, by another six months to December 2021, saving it from committing billions to Beijing lenders.<\/p>\n

The moratorium started in January 2021.<\/p>\n

China postponed the repayments in January, helping Kenya temporarily retain Sh27 billion, which was due for six months ending June 30.<\/p>\n

But opposition from Chinese lenders forced Nairobi to drop its push for an extension of the debt repayment holiday to avoid straining relations with Kenya\u2019s biggest bilateral creditor.<\/p>\n

Kenya earlier wired Sh29.86 billion to China in the quarter to September 2021 to ease a standoff over debt repayments that delayed disbursements to projects funded by Chinese loans.<\/p>\n

Treasury documents revealed earlier that Kenya paid the billions in a period when Chinese lenders, especially Exim Bank, had opposed Kenya\u2019s application for a debt repayment holiday.<\/p>\n

The G20 countries, including Belgium, Canada, Denmark, France Germany, Italy, Japan, Republic of Korea, Spain and the USA, rescheduled payments of Sh32.9 billion in principal and interest due between January and June to the next four years with a one-year grace period.<\/p>\n

While China is a G20 member and a signatory to the deal, a large proportion of its loans to Kenya has been made on a commercial basis by government agencies, quasi-public corporations and by state-owned banks such as China Development Bank and Exim Bank of China.<\/p>\n

China has sought to negotiate its debt relief deals separately but applying the same terms as the G20 countries while reserving the right on size and which loans will attract the moratorium.<\/p>\n

President Uhuru Kenyatta\u2019s administration has largely taken loans from China since 2014 to build roads, bridges, power plants and the standard gauge railway (SGR).<\/p>\n

This started after Kenya became a lower-middle-income economy, locking her out of highly concessional loans from development lenders such as the World Bank.<\/p>\n

The terms of China\u2019s loan deals with developing countries are unusually secretive and require borrowers to prioritise repayment to Chinese state-owned banks ahead of other creditors. A cache of such contracts was revealed in an earlier report by Reuters<\/b>.<\/p>\n

The dataset — compiled over three years by AidData, a US research lab at the College of William & Mary — comprises 100 Chinese loan contracts with 24 low- and middle-income countries, a number of which are struggling with mounting debt amid the economic fallout from the Covid-19 pandemic.<\/p>\n

It uncovered several unusual features, including confidentiality clauses that prevent borrowers from revealing the terms of the loans, informal collateral arrangements that benefit Chinese lenders over other creditors and promises to keep the debt out of collective restructurings — dubbed by the authors as \u201cno Paris Club\u201d clauses.<\/p>\n

The Paris Club is a group of officials from major creditor countries whose role is to find solutions to the payment difficulties of debtor countries.<\/p>\n

China\u2019s \u201cBelt and Road\u201d initiative has been praised by supporters for providing vital financing to infrastructure-starved countries. Critics, including the United States, say the program is overloading poor nations with debt.<\/p>\n

For More News And Analysis About Kenya<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Kenya. The elevation of Kenya to the middle-income status saw China lock the country out of a new list of African nations that will receive a Beijing debt relief this year, under a plan by the world\u2019s second-largest economy to help 17 poor states in the continent saddled with its huge loans forego […]<\/p>\n","protected":false},"author":84,"featured_media":66277,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,7,8,12,16],"tags":[6857,7003,544],"class_list":["post-66278","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-head-lines","category-homepage-english","category-policy","category-twitter","tag-africa-press","tag-africa-press-kenya","tag-kenya"],"yoast_head":"\nChina locks out Kenya from new debt relief deal - kenya<\/title>\n<meta name=\"description\" content=\"The elevation of Kenya to the middle-income status saw China lock the country out of a new list of African nations that ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China locks out Kenya from new debt relief deal\" \/>\n<meta property=\"og:description\" content=\"The elevation of Kenya to the middle-income status saw China lock the country out of a new list of African nations that ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal\" \/>\n<meta property=\"og:site_name\" content=\"kenya\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2022-08-26T13:52:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-08-26T13:56:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2022\/08\/postQueueImg_2-6308d0ca34423.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"720\" \/>\n\t<meta property=\"og:image:height\" content=\"540\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"China locks out Kenya from new debt relief deal\",\"datePublished\":\"2022-08-26T13:52:59+00:00\",\"dateModified\":\"2022-08-26T13:56:09+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal\"},\"wordCount\":915,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/kenya\/sites\/28\/2022\/08\/postQueueImg_2-6308d0ca34423.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Kenya\",\"Kenya\"],\"articleSection\":[\"all news\",\"head lines\",\"homepage-english\",\"policy\",\"twitter\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal\",\"url\":\"https:\/\/www.africa-press.net\/kenya\/all-news\/china-locks-out-kenya-from-new-debt-relief-deal\",\"name\":\"China locks out Kenya from new debt relief deal - 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