- Japan has emerged as the top bilateral lender to the East African nation for the second year running as revealed by the Treasury in the budget estimates for the financial year starting July.
For nearly a decade, China has been the biggest financier of Kenya. However, during the past couple of years China has been trimming its fresh financial commitment to Kenya’s development projects .As a result, Japan has emerged as the top bilateral lender to the East African nation for the second year running as revealed by the Treasury in the budget estimates for the financial year starting July. China has committed Sh21.25 billion in the current year ending June against Tokyo’s Sh36.49 billion, according to the Treasury’s budget books.
China, however, remains the biggest bilateral creditor to Kenya by virtue of the big-ticket deals signed with Kenya in the last decade to fund and build mega infrastructure projects such as roads and a modern railway. For instance, Kenya’s debt to China stands around $6.95 billion last December compared with $1.42 billion to Japan.
At the Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC), last November, President Xi Jinping had stated that China would reduce investments in Africa by a third in three years. During the Summit he pledged $40 billion to Africa, a 33.3 percent drop from the $60 billion in the last two FOCAC summits.
According to the latest Treasury budget estimates, Sh15.62 billion from the Chinese loan in the coming year will be injected into projects, largely power transmission infrastructure, under the Energy ministry. Infrastructure Department will get Sh5.73 billion, while the ICT and Water & Sanitation ministries will be funded to the tune of Sh4.02 billion and Sh4.10 billion, respectively. Japanese funding is earmarked for projects under Infrastructure Department (Sh17.66 billion), the Energy ministry (Sh9.17 billion), and the Treasury (Sh2 billion), among others.
Five countries — Japan (Sh31.11 billion), China (Sh29.46 billion), France (Sh23.36 billion), Germany (Sh14.42 billion) and Italy (Sh6.07 billion) — account for 81.66 percent of projected bilateral loans. The multilateral lending for projects has been estimated to be around Sh205.63 billion in the 2022/23 fiscal year.
Read Also; https://trendsnafrica.com/kenya-china-chamber-of-commerce-formed-to- boost-bilateral-ties/
https://trendsnafrica.com/rising-external-debts-dents-kenyas-growth-outlook-for-2022/
https://trendsnafrica.com/the-burden-of-paying-creditors-weighs-heavy-on-kenya/
