The International Monetary Fund (IMF) has absolved China of primary responsibility for Kenya’s debt burden and that of other Sub-Saharan African countries, according to the IMF’s Regional Economic Outlook for Africa.
Table: Key Points
| Key Points | Details |
|---|---|
| China’s Debt Share | China accounts for 12% of Africa’s total public and private external debt, which grew to Ksh10.4 trillion over the past decade. |
| Kenya’s Debt to China | As of March this year, Kenya owed China Ksh946 billion. |
| China’s Lending Share | The IMF report states that Chinese lending represented less than 6% in 2021, considerably less compared to Western countries and multilateral lenders. |
| Debt Contributors | The IMF emphasized that Chinese debt has not been the primary contributor to the region’s rising public debt over the past 15 years. |
| Domestic Commercial Borrowing | The report reveals that 60.9% of Africa’s public debt is due to domestic commercial borrowing, which often carries higher interest rates and shorter maturities. Multilateral lenders account for 13.7% of the debt. |
| Accusations against China | Some Western states have accused China of increasing debt burdens in African nations through its lending practices, a claim China denies. |
| China’s Share in Kenya’s Debt | China holds 21% of Kenya’s public external debt, while private creditors hold 24%, and multilateral institutions hold 45%. |
| Kenya-China Relationship | Kenya’s relationship with China has strengthened in recent years, with President Ruto securing financial deals during his official visit to China. |
The IMF report clarifies that China’s lending role is relatively small, contributing to less than 6% of debt in 2021, while Western nations and multilateral lenders have a more substantial share in Africa’s sovereign debt. In the case of Kenya, China holds 21% of the country’s public external debt, with the majority being held by private creditors and multilateral institutions.
The relationship between Kenya and China has grown stronger over the years, with President Ruto securing significant financial deals during his official visit to China, totaling Ksh688.7 billion. Chinese loans now constitute 64% of Kenya’s external debt, with the country maintaining a diplomatic and economic partnership with both China and Western nations.
While concerns have been raised about the impact of foreign debt on Kenya, the IMF report suggests that the blame for debt distress in Africa is not solely attributable to China but is also influenced by other domestic and international lending practices.
