China has put on hold, debt repayments to Kenya, over Covid-19 pandemic pressure.
Kenya is one of 12 countries in Africa that has received the suspension according to a statement from the Chinese embassy.
Under the G20 framework, 15 other African countries have also received waivers of matured interest-free loan.
According to the embassy, the China International Development Cooperation Agency and the Export-Import Bank of China have implemented all eligible debt suspension requests of the developing nations.
“China attaches great importance to debt suspension and alleviation in African countries including Kenya and is committed to fully implementing the G20 Debt Service Suspension Initiative,” the embassy noted.
” We stand ready to strengthen coordination with Kenya and assist Kenya in its efforts to address debt challenges. “
The embassy however made no mention of whether Kenya will get relief through the same initiative.
The East African nation is listed among the countries that are likely to default on external loans in the next five years, risking strategic assets used as collaterals.
IHS Markit’s published report titled ‘Investors fret over sovereign bankruptcies in coming years’ compiled by the Financial Times, shows Kenya’s probability of defaulting has grown to 35 per cent.
Top of the list is Argentina with a probability of 55 per cent, Angola 52 per cent, Pakistan 48 per cent, Iraq 45 per cent and Cameroon 42 per cent.
In the past ten years, Kenya’s public debt has been on the rise, with the International Debt Statistics 2021 by the World Bank showing that the country’s external debt has grown four folds in the past decade.
The total external debt grew to $34.2 billion (Sh3.48 trillion) last year from $8.55 (Sh872.1 billion) in 2009, a huge chunk of it from Chinese lenders. This was according to the published report.