China Displaces World Bank as Kenya's Largest Creditor

China has displaced World Bank to become Kenya's single largest foreign creditor.

Figures now show that China accounts for 72 per cent of the total debt owed to foreign lenders by Kenya.

In a period of about one decade, the Kenyan government has borrowed Sh534 billion from China compared to Sh508 billion owed to the World Bank.

Currently, Kenya's local and international debt stands at a whopping Sh5.011 trillion with the government spending 54 per cent of revenue collected in the 2018/19 financial year to repayment of debts.

Local and international experts, including International Monetary Fund (IMF) have warned that Kenya's soaring debt could reach a point where it will not be manageable.

“We have been much concerned about the flow of new debts and the size of fiscal deficit. It will reach a point where the debt is not manageable especially when the deficit continues to rise,” IMF representatives for Kenya Jan Mikkelsen said earlier this year.

Treasury Cabinet Secretary Henry Rotich has however maintained that Kenya's debt is sustainable.

“We are able to comfortably repay our debt without being insolvent. As long as we are able to repay this debt without consuming a huge chunk of our revenues in terms of servicing it, our debt is viewed as sustainable,” Rotich said recently.