In Summary
  • By opening up our road, rail and port networks to China, we are actually helping the foreign country to increase its volume of exports to Kenya.
  • Kenya stands a better chance in first exploiting its comparative advantage in agriculture at a time when there have been increases in global food prices.

The threat to Kenya’s sovereignty should it default on repaying its standard gauge railway loans to China should not be a surprise.

Last year, several African heads of state signed a deal with Chinese President Xi Jinping and were promised $90 billion (Ksh9.1 trillion) “unconditional” loans.

Whenever goods are advertised as “free”, one should try to see the catch. There is no ‘free lunch’; everything has a price.

In fact, when a deal is too good to be true, think twice. Therefore, although $90 billion is pocket change for the Chinese reserve bank, it would be naive to believe that a loan has no strings attached.

China has maintained a communist regime that has silently, but strategically, developed its economic power to surpass other global giants just over the past 40 years due to its shrewd economic management. It is now a power to be reckoned with.

MINERALS

In the past 20 years, the Asian country has made inroads into Africa by dangling the loans and infrastructure development carrot that gullible Africans have grabbed.

Its favourite projects have been road, rail and seaport infrastructure to enhance transportation.

However, most of these projects are in strategic areas with unexploited mineral deposits such as copper, iron ore, coal and gold.

Kenya’s SGR line was strategically built along a belt that is rich in iron ore, coal, titanium and fluorspar.

In fact, China will also target exploiting the minerals in the past of these networks in their raw form and then sell them back to Africa as value-added products.

TRADE

Isn’t this path similar to how our former colonialists organised their commercial interests in Africa?

While it is true that these infrastructure projects have been useful to Kenyans, in the long run, who will be the greatest beneficiary?

I have reasons to believe it will be China due to its sheer volume of exports to Kenya, estimated at over $300 billion as compared to Kenya’s less than $9 billion.

By opening up our road, rail and port networks to China, we are actually helping the foreign country to increase its volume of exports to Kenya.

Page 1 of 2