President Uhuru Kenyatta’s trip to China to seek for more loans hit a dead end after China President Xi Jinping gave a sweeping warning on the attendees of the Belt and Road Initiative (BRI.)
Kenyatta is currently in China for a three-day tour of China, where he hopes to land a loan which will bankroll the second phase of the Standard-Gauge Railway from Nairobi to Kisumu through Naivasha.
But speaking to attendees which numbered more than 34 heads of state, President Xi warned the leaders to make good use of the borrowed money to benefit their countries.
In his 30-minute long speech on the first day of the conference, Xi advised that the funds should also be used in a transparent manner.
“Building high-quality, sustainable, risk-resistant, reasonably priced, and inclusive infrastructure will help countries to fully utilise their resource endowments,” said Xi.
“Everything should be done in a transparent way and we should have zero tolerance for corruption,” he added.
International Monetary Fund (IMF) Managing Director Christine Lagarde noted that countries should be careful with the debts.
“History has taught us that, if not managed carefully, infrastructure investments can lead to a problematic increase in debt,” said Lagarde.
“I have said before that, to be fully successful, the Belt and Road should only go where it is needed. I would add today that it should only go where it is sustainable, in all aspects.”
Some of the countries who have failed to repay their Chinese loans are Sri Lanka and Zambia.
In Sri Lanka, the government surrendered 70 per cent of a major port in the island country as the only means to repay the debts.
Closer home in Zambia, the Chinese took over the management of the Zambian Airport after the country defaulted on its loan to China.
Zambia’s debt to China is Sh310 billion.
Do you think Kenya’s SGR loan will be used well?