China Preparing to Take Over Kenya’s Main Port?

China may be preparing to take control of Kenya’s largest port as a result of debt-trap diplomacy, according to recent African media reports.

The Kenyan government is at risk of “losing the lucrative Mombasa port to China should the country fail to repay huge loans advanced by Chinese lenders,” African Stand wrote on December 20, 2018.

Since 2013, Kenya has accepted some $4.9 billion for the construction of the Stand Gauge Railway (sgr) connecting Mombasa, the largest port in East Africa, and Kenya’s capital, Nairobi. The sgr is the largest infrastructure project Kenya has undertaken since its independence. But in its first year of operation, the project reported losses equivalent to $98 million, making Kenya’s servicing of the loans unmanageable.

Kenyan Auditor General Edward Ouko warned last month that the terms of the deal were designed to favor the China Exim Bank, which loaned Kenya Railways Corp. the funds to build the sgr. “If Kenya Railways Corporation defaults in its obligations and China Exim Bank exercises power over the escrow account security,” his office wrote in a November 16 audit report, “ the China Exim Bank would become a principle” over some Kenyan assets.

Africa Stand noted that, besides the Mombasa port, Kenya could also be pressured to hand the Chinese control of the Inland Container Depot in Nairobi. “Implications of a takeover would be grave, including the thousands of port workers who would be forced to work under the Chinese lenders,” it wrote.

Authorities in both Kenya and China have refuted reports. But if China were to take control over some Kenyan assets due to its failure to repay loans, it would not be China’s first time.

Source :Africa Stand