Kenya debt level called sus­tain­able

China Daily European Weekly - - Business -

Cab­i­net sec­re­tary for the trea­sury says gov­ern­ment is en­sur­ing ‘ high lev­els of fis­cal dis­ci­pline’

ris­ing debt, which has reached $297.3 bil­lion (227 bil­lion eu­ros; £199 bil­lion) — a debt-to-GDP ra­tio of more than 50 per­cent. It also comes barely a month af­ter then US sec­re­tary of state Rex Tiller­son ac­cused China of push­ing up Africa’s debt lev­els, say­ing this com­pro­mised sovereignty by en­cour­ag­ing de­pen­dency.

How­ever, Rotich says the loans are used for in­fra­struc­ture devel­op­ment such as rail­ways, roads, air­ports, en­ergy projects, ed­u­ca­tion and health, which he de­scribes as eco­nomic en­ablers. He also says the cut­backs will not af­fect on­go­ing pro­grams.

Ac­cord­ing to Rotich, many for­eign gov­ern­ments do not yet un­der­stand Sino-African en­gage­ment. “They don’t un­der­stand the type of re­la­tion­ship Africa has built with China over the years. It is within the Fo­rum on China-Africa Co­op­er­a­tion plat­form that we have de­vel­oped a clear and trans­par­ent en­gage­ment,” he says.

Rotich adds that Kenya is try­ing to repli­cate China’s eco­nomic suc­cess, which has seen the Asian coun­try lift mil­lions of peo­ple out of poverty. “China un­der­stands our devel­op­ment model, and this is a coun­try that is shar­ing their ex­pe­ri­ences.”

He says the days of dic­tat­ing to Africa are long gone, re­placed by an era of part­ner­ship. “China has pur­sued a de­vel­op­men­tal path with Africa and this is the way to go. Devel­op­ment is for ev­ery­body, and coun­tries are look­ing at how other part­ners can con­trib- ute and align their as­sis­tance along na­tional strate­gies to en­sure that suc­cess is shared.”

He says Kenya is work­ing on bring­ing the suc­cess of gov­ern­ment-to-gov­ern­ment en­gage­ment to the pri­vate sec­tor.

On pri­vate-pri­vate part­ner­ship, Rotich says the gov­ern­ment has been strength­en­ing the le­gal frame­work to en­able fi­nanc­ing mod­els such as buil­d­op­er­ate-trans­fer and build-own-op­er­ate-trans­fer in the boom­ing in­fra­struc­ture sec­tor. He says there are en­ergy projects un­der this model, such as the $2 bil­lion Lamu coal plant, which is a joint ven­ture be­tween a lo­cal com­pany and a group of Chi­nese en­ter­prises, and the $1.49 bil­lion road ex­pan­sion project on a 180-kilo­me­ter stretch of road be­tween the cities of Nairobi and Nakuru.

“How­ever, we have to un­der­stand that this is new and com­plex,” Rotich says.

The trea­sury min­is­ter also con­firmed plans to cre­ate a na­tional in­vest­ment coun­cil to speed up com­ple­tion of mega-projects such as spe­cial eco­nomic zones. The coun­cil, which would in­clude the pres­i­dent, the min­is­ters of land, fi­nance and for­eign af­fairs and the at­tor­ney gen­eral, is ex­pected to im­prove co­or­di­na­tion and ap­proval of projects.

Rotich says in­fra­struc­ture will con­tinue to be a gov­ern­ment pri­or­ity. “We are also fo­cus­ing on the pres­i­dent’s Big Four agenda and plan to present these strate­gies dur­ing the forth­com­ing FOCAC event in Bei­jing.”

Spear­headed by Pres­i­dent Uhuru Keny­atta, the Big Four aims at strength­en­ing food se­cu­rity, af­ford­able hous­ing, man­u­fac­tur­ing and af­ford­able healthcare.

On the trade ten­sions be­tween China and the United States, the trea­sury min­is­ter says that pro­tec­tion­ism ex­hib­ited by the US is erod­ing the gains of eco­nomic glob­al­iza­tion and will slow down growth. “Open­ness has helped im­prove com­pet­i­tive­ness of coun­tries. Hav­ing bar­ri­ers will cre­ate in­ef­fi­cien­cies in some coun­tries and re­duce pro­duc­tiv­ity. ... No one wins.”

How­ever, he says he be­lieves that projects un­der the China-led Belt and Road Ini­tia­tive will ac­cel­er­ate re­gional in­te­gra­tion and pro­mote in­tra-Africa trade.

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