Chinese loans to Kenya have dropped for the first time in 15 years as Beijing adopts more cautious lending in Africa where some nations have reached the limit of their borrowing capacity and the prospect of default looms.
Data from the Treasury show China’s total lending dropped to $6.83 billion in June from $7.05 billion a year ago and $3 billion in 2016.Available public records show that Chinese loans to Kenya dropped marginally in 2022.
The rare fall in Chinese debt emerges in a period when the World Bank and the International Monetary Fund (IMF) have stepped up lending to Kenya, firming the institutions’ grip on the country’s economy.
Nairobi has been a major beneficiary of China’s loans for the development of mega infrastructure such as roads and a modern railway over the last decade, making Beijing the largest bilateral creditor since 2015.The IMF in 2020 listed more than 20 African countries, including Kenya, as being in, or at high risk of, debt distress.In response, lenders, including China Eximbank and China Development Bank, China’s two main policy banks, have adopted increasingly hardline lending terms.