No Kenyan assets mortgaged for the SGR loan

Standard gauge railway line./COURTESY

Nairobi, KENYAN: None of Kenya’s national assets has been mortgaged for the Standard Gauge Railway (SGR) loan, neither would any single Kenyan national asset be seized nor controlled by China, even in a situation of default.

This is according to Chinese Ambassador to Kenya Wu Peng.

Peng, who was speaking during the 6th press club meeting with Kenya editors in Nairobi on Tuesday, assured that any loan agreement between China and Kenya are in line with common international best practice that does not allow risking of country’s assets through lending of loans.

Peng said he had to put it clear after some media expressed concerns about the so called secrecy clauses between China and Kenya on the SGR construction between Mombasa and Nairobi.

“Debt is a topic that both Kenya and international media are very interested in. I have heard much criticism on the Kenya debt burden, including loans from China,” Peng said.

He added that based on findings of China- Africa Research initiative at Johns Hopkins University and Boston University’s Global Development Policy Centre, the risk of China lending are often overstated or mischaracterized.

“China always attaches high importance to debt sustainability. Before making decisions, Chinese companies and banks, even the third party, go through rigorous feasibility studies, evaluation and review of a country’s credit rating,” he added.

He however, pointed out SGR was a flagship project which showcased the fast speed and high quality of China-Kenya cooperation.

“The building of Mombasa- Nairobi SGR has driven the Kenya’s economic growth by 1.5 per cent and created 46 thousand jobs for local residents. Nairobi- Naivasha phase B construction has employed 5,424 Kenyans nationals, “he added.

In addition, he noted that he takes Kenyans criticism very serious but urged them not to blame one side in terms of economic attitude since the bilateral trade balance is ultimately determined by the economic structures, industrial competitiveness and international industrial specialization.

This comes even when recently Kenya signed an agreement with China on the export of frozen Avocados to china, which makes Kenya the first African country to export such a product.