It has been widely reported in the press that Mombasa port has been used as collateral for the Chinese loan to build the standard gauge railway.
Neither the Treasury nor the Kenya Ports Authority has confirmed that the port is collateral. It is also unlikely that the government will default on the SGR repayments, resulting in the seizure of the port by China.
Nevertheless, various countries have had to pay off China with physical assets after overborrowing for infrastructure. Last year Sri Lanka gave China a 99-year lease on its Hambantota port to reduce its $8 billion debt. In September the Zambian government denied that it had handed over the Kenneth Kaunda airport to China or offered it as collateral for loans.
Public concern is genuine. Kenya’s foreign debt has more than doubled since 2013 and Kenya now owes China over $5 billion ( Sh500 billion). Many contracts, not just with China, are opaque and shadowy.
There should be full disclosure and transparency on all foreign contracts for infrastructure, and for oil and mineral extraction.
Quote of the day: "We must choose between champagne for a few and drinking water for everyone".
President of Burkina Faso
was born on 21 December, 1949