why Chinese loans was a grave mistake for Kenya

China Debt Trap

China Debt Trap

China has been taking control of economies in a number of African countries with research data revealing that it has overtaken the United States as Africa’s economic powerhouse. China is a populous nation in East Asia whose vast landscape encompasses grassland, desert, mountains, lakes, rivers and more than 14,000km of coastline. With a population of over 1.379 billion, it needs a lot of money to run its economy. This large number of China’s population need jobs and living space and China’s government is doing right by its people, irrespective of what the consequences for Africa might be.

Chinese debt has become the methamphetamines of infrastructure finance: highly addictive, readily available, and with long-term negative effects that far outweigh any temporary high. This is particularly true in sub-Saharan Africa, where China has become the largest provider of bilateral loans. Forty percent of sub-Saharan African countries are already at high risk of debt distress; by having so much debt concentrated in the hands of a single lender, they are dangerously beholden to their supplier.

In Africa and elsewhere, governments have secured massive loans from China using strategic assets—such as oil, minerals, and land rights— as collateral. If borrower nations find themselves unable to repay the loan, China can claim the strategic asset such as ports where they can control that countries economy.

For any loan to be recovered, the finances need to be put into projects with high economic returns, Africa is drowning in corruption and these loans cannot be an exception especially in Kenya where almost half the budget results into scandals that are forever unsolved. Kenyan leaders, therefore, don’t seem to have a favorable exit plan which is likely to lead us to what the countries below have had to experience.

READ ALSO: Understanding Kalenjin Initiation Rites

Seven Countries Trapped in China’s Exploitive Loans-Debt Trap Diplomacy.


Chinese And U.S Bases In Djibouti

China set up a full-scale military base in Djibouti after relationship formed despite the U.S also have their military base there. Chinese military allegedly fired lasers as the U.S aircraft from their base escalating tension further between the two countries.

China having the influence on Djibouti could not allow the United States to take any action on the Chinese militants given China owned 82 percent of Djibouti’s foreign debt, according to Center for Global Development.

Djibouti is now at the edge of handing over control of a significant port to state-controlled Chinese firms following defaulting in Chinese loans.


In 2000, Angola took loans from China totaling 21.2 billion dollars. The loan, currently, is estimated to be around a quarter of cumulative Chinese loans to those of the rest of the continent.

Angola’s loan with China is however not financially serviced but is paid back with oil since the country is the second largest producer of the product in Africa. Angola’s ability to repay China is hence pegged on the price of the oil leaving very little oil for Angola to export to other partnering countries.


According to statistics from Namibia’s Finance Ministry, the country owes China N$1,99 billion.

This debt is broken down in two categories, N$302 million for the interest-free loans and N$1,694 billion for the concessional loans.

China has gone further to provide grants to Namibia’s government totaling to N$1,340 billion which all totals to N$3,336 billion.


Zambia has not been spared too from China’s debt trap diplomacy and despite its declining economy; its borrowing appetite has not subsided.

China’s loans to Zambia date back to the year 2011 running into more than 8.5 billion dollars. Chinese state-controlled firms have since taken control of Zambia’s strategic assets for around 30 years. Lusaka Airport, East Park mall and tollgate plazas and east park mall are just a few examples. Lusaka airport is under a 360 million dollar expansion with the loan coming from Exim Bank of China.

READ ALSO: Five Things You Can’t-Miss In A Kalenjin Home.

Sri Lanka

Sri Lanka has experience on just what could happen to Kenya if it fails to pay up its loans.

Sri Lanka officially handed over its strategic Hambantota port to China on a 99-year lease, last year after it failed to repay a debt of 8 billion dollars to Chinese firms that are state-controlled. This gave China a crucial access to Indian Ocean’s sea lanes which greatly alarmed New Delhi.

Africa countries signing off so much of African assets risk taking us back to colonialism after our forefathers sacrificed their lives to deliver our countries.


Chinese companies offered strict terms for Zimbabwe to secure loans four years after it had defaulted in paying in 1990 under President Mugabe.

China requested to be exempted from the local labor laws and be prioritized in mineral exploration. Zimbabwe almost sold off mineral rights to China due to the loan.


Standard Gauge Railway Inaugural

Standard Gauge Railway Inaugural

China is the leading external debtor to Kenya, currently with its trade deficit with Beijing growing alarmingly.

Not less than 70 percent of Kenya’s foreign debt is by China, which is estimated at more than 557 billion dollars, with Kenya joining the Asian Infrastructure Investment Bank.

China prides for majorly financing, the Standard Gauge Railways connecting Mombasa to Nairobi and the Nairobi Thika Superhighway. Loans taken for the above projects are yet to be repaid with loans still being taken up by the Government.

China’s citizens, however, seem to have comfortably fit in Kenya, owning property and holding offices. The most current show of Kenya having sold its soul to China being that of Liu Jiaqi, after a recording of him insulting the presidency and Kenyans went viral and instead of him facing prosecution, the Government chose to deport him which we can only hope at least shall actually be done.


Kenya is drowning due to high corruption rates and scandals that are going unaccounted for. For China to prosper they sentence corruptors with a death penalty with the latest being a former deputy mayor of a Chinese city being the first the first to be sentenced. This should be replicated in African countries so as to curb corruption cases and improve the economy.



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