African states must go slow on Chinese loans

Tuesday April 23 2019

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China is convening the second Belt and Road Forum for International Cooperation this week, a crucial meeting that brings together heads of state, investors and international organisations and which signals how the country has emerged a central player in global politics and economics.

Since 1978, when China under Deng Xiaoping rolled out a new blueprint for socio-economic growth, the country has surprised the rest of the world with the level of its progress; surpassing traditional powerhouses to become the second greatest economy, after the US. Indeed, the growth has seen millions pulled out of poverty and erstwhile poor households thrust to prosperity.

To Africa and Kenya in particular, China has become a dependable ally. For the past two decades or so, China has become a major donor, providing infrastructure and investment loans that have helped the country record massive expansion of roads, rail and other utilities. The Standard Gauge Railway from Mombasa to Nairobi and the Thika Superhighway, remain the poster signature of Sino-Kenya cooperation. It is instructive that part of Kenya’s remit at the forum is to negotiate additional loan to extend the SGR to Kisumu and Uganda border.

Clearly, the forum is paramount in cementing existing relationships and opening new opportunities for cooperation.

But that is also the point of departure. Africa and Kenya must take a critical review and examination of the relationship with China and especially the extensive inflows of loans and investment capital. For starters, the reason China upstaged other traditional bilateral and multilateral donors is ease with which it offered loans and grants.

Whereas Western countries stringently tied development cash to political reforms and human rights, China opened its hands and welcomed those seeking its support. Funds are given without strings attached. This has been an appealing model and came at a ti