Gov't Dismisses Reports That China Could Seize Mombasa Port over Sh364 Billion Debt

The government through the National Treasury has dispelled reports that China could seize Mombasa Port if Kenya defaults on the Sh364 billion standard gauge railway (SGR) loan.

Treasury Cabinet Secretary Ukur Yatani termed the reports by The Star as misleading and alarmist, adding that such reports could impair Kenya’s relations with development partners and foreign investors.

In an article on Monday, The Star reported that the government used Kenya Ports Authority (KPA) assets as collateral for the Sh363.96 billion loan. The publication cited an Auditor-General report tabled in Parliament.

“The government of Kenya cannot and has not pledged public assets as security for a debt, because such an action would not only violate provisions in its existing loan agreements with other bilateral creditors but more importantly because Kenya treats all its creditors equally,” said CS Yatani.

While insisting that Mombasa Port has no adverse exposure to any lender, Yatani said Kenya will continue to honor its debt repayment obligations to boost its credit standing, attract investment and promote growth and development.

The Treasury further noted that the three loan agreements Kenya signed with the Export-Import Bank of China to finance the SGR project were in line with the Kenyan laws.

 “The government through National Treasury is servicing SGR loans in accordance with the provisions of the loan agreements and the Public Finance Management (PFM) Act 2012,” added CS Yatani.