TAIPEI (Taiwan News) – China may be preparing to seize some major assets in the African nation of Kenya, as a result of debt-trap diplomacy.
African media reports that Kenya may soon be forced to relinquish control of its largest and most lucrative port in Mombasa to Chinese control.
Other assets related to the inland shipment of goods from the port, including the Inland Container Depot in Nairobi, and the Standard Gauge Railway (SGR), may also be compromised in the event of a Chinese port takeover.
Kenya has reportedly taken extremely large loans from the Communist government for the development of some major highways, and especially for the SGR, which forms a crucial transport link to and from Nairobi for the import and export of goods through Mombasa.
In November, Moody’s noted that Kenya is at high risk of losing strategic assetsbecause of debts owed to Beijing.
After a subsequent report from the country’s Auditor General, local media began to express concern that Chinese lenders may be angling to seize assets, since it does not appear the Kenyan government will be capable to repaying the loans.
Now, one month later, ahead of the New Year, it’s been reported that the Chinese may be preparing to take over the Mombasa Port infrastructure soon.
The African Stand also seems to suggest that the SGR, which is operated by the Chinese, may have been designed to be a “loss-making venture.”
With a reported loss of KES 10 billion (US$98 million) in its first year of operation, it would be nearly impossible to repay the loans taken for its construction in the time requested. Kenya reportedly accepted loans of KES 500 billion (US$4.9 billion) for the SGR’s construction.
Kenya’s Standard Guage Railway linking Mombasa to Nairobi (Associated Press Photo)
Kenya’s Auditor General reportedly stated that deal has always favored the China Exim Bank, which advanced the loan for the project. Further, Kenya signed on to a deal that requires any arbitration of disputes related to the debt must take place in China.
From the African Stand.