President Uhuru Kenyatta says his government will continue to borrow loans from China and the rest of the world despite criticism from different quarters that the national debt is unsustainable.
Mr. Kenyatta remained adamant that loans are necessary for any country that expects to improve its infrastructure.
“I will continue to borrow to develop the country,” he said on Friday during the roundtable interview with journalists at State House, Mombasa.
He denied claims that the Mombasa Port has been mortgaged to the China Exim Bank over the Standard Gauge Railway loan, noting that the government is ahead on its repayment schedule.
“You have seen the Chinese Government say that nothing like that exists. If you want a copy of the contract we have with China I can get it to you tomorrow,” he retorted. Referring to a statement that was released by the Chinese Embassy in Kenya on December 25th, 2018.
China also denies having attached the Mombasa port as collateral to its funding of the Standard Gauge Railway line.
Chinese Foreign Ministry Spokesperson Hua Chunying said in a statement that fears that China will take over the port should Kenya default on the Sh327 billion loan to build the Mombasa-Nairobi SGR were not true.
We have checked with the relevant Chinese financial institution and found that the allegation that Kenyan side used the Mombasa Port as collateral in its payment agreement with the Chinese financial institution for the Mombasa-Nairobi railway is not true,” Ms. Hua said in the statement released on 25th December.
The President of Kenya added that “The issue of the take over of Mombasa Port by China is pure propaganda. We are ahead of our payment schedule for the SGR loan and there is no cause for alarm,” Uhuru said.
He warned Kenyans against spreading “porojo”(propaganda) adding that what exists is a contract between the Kenya Railways and Kenya Ports Authority that goods will be transported via the Standard Gauge Railway (SGR) where possible.
“We are opening up roads across the country and a railway line that never existed 50 years ago. The debt we are incurring is for development projects that will not only benefit this generation but future ones as well,” he added.
Uhuru Kenyatta also mentioned that only 30percent of Kenyans were connected to electricity when he became President but the number has since doubled because of government loans which have been used to develop the nation.
When asked whether the bulk of the government loan being from China could be detrimental to the country, he said Kenya is not tied to any country.
The President said Kenya is working with partners who understand its development needs and China is one of them.
“China is a very strong development partner just as is the World Bank, Japan, France, Germany,” he said.
He revealed that during his visit to the United States, Kenya’s partnership with China was also questioned but he told American business leaders that the East Asian nation has developed financial packages that suit most of Africa’s needs.
President Kenyatta said the U.S. has since come up with its own products that will see American companies receive a boost of $60billion, a move he said will support firms that do business in Africa.