Kenya Converts Chinese Loans from Dollar to Yuan Denomination

 Kenya's Sharp Daily published on 30 January 2026 an article titled "Kenya's Shift to Yuan-Denominated Debt: Economic Strategy, Risks, and Regional Momentum" by Ryan Macharia.

Kenya has converted three dollar-denominated loans with the Export-Import Bank of China into yuan, a restructuring expected to reduce annual debt servicing costs to China by $215 million annually.  Yuan-denominated interest rates are lower than their dollar counterparts, easing pressure on Kenya's public finances and reducing exposure to US interest rate cycles.

The International Monetary Fund cautions, however, that while currency conversion can reduce near-term costs, it also introduces exposure to Chinese currency fluctuations, which may pose new currency risks if not matched with sufficient yuan revenue streams or hedge strategies.  

China Moves Deeper into African Banking

 Uganda's The Observer published on 5 December 2025 an article titled "China's Payment System Gains Ground in Africa as Afrexim, Standard Join In."

Afreximbank, Africa's multilateral trade bank, became the first major African institution to join China's Cross-Border Interbank Payment System (CIPS), enabling direct and cheaper yuan transactions.  Standard Bank Group, the continent's largest lender, followed suit.  CIPS gives China an alternative to the Western world's SWIFT. 

The Industrial and Commercial Bank of China (ICBC) owns 20 percent of the Standard Bank Group while the Export-Import Bank of China holds at least 6 percent of Afreximbank.   

Inauguration of Grand Ethiopian Renaissance Dam

 IntelliNews published on 7 September 2025 an article titled "Ethiopia Set to Inaugurate $4bn Mega-Dam as Egypt, Sudan Renew Strong Objections" by Brian Kenety.

Ethiopia is inaugurating on 9 September the $4 billion Grand Ethiopian Renaissance Dam, the largest hydro dam in Africa.  Downstream Sudan and Egypt continue to oppose construction of the dam, arguing it undermines their historic rights to Nile water flows guaranteed under colonial-era treaties to which Ethiopia was not a party.  

New Trends in Chinese Financing in Africa

 The UK-based Overseas Development Institute (ODI) published in October 2024 a study titled "China's Creditor Diversification in Africa" by Tianyi Wu, Oxford University, and Yunnan Chen, ODI.

China's overseas lending is evolving and diversifying.  Financing is becoming less concessional and more targeted to commercial sectors in energy and mining.  Going forward, commercial creditors are expected to increasingly focus on infrastructure sectors with clear and immediate revenue potential.  

Can the US Take Advantage of China's Economic Challenges in Africa?

 The Hill published on 10 July 2024 a commentary titled "China's Losses in Kenya Are America's Opportunities in Africa" by Gordon G. Chang.

China is Kenya's biggest bilateral creditor, holding $8 billion of its external debt, which has contributed to country-wide protests.  The author argues that this is a time when the United States can improve its position in Africa as China struggles with some of its economic relationships.

China Provides Loans for Cameroon's Port Expansion

 The South China Morning Post published on 26 May 2024 an article concerning Chinese loans continue to support Cameroon's seaport initiative by Jevans Nyabiage..

The China Export-Import Bank provided about $1.48 million in loans to build the first and second phases of Cameroon's Kribi port on the Atlantic as well as a highway leading to it.  China Export-Import Bank is providing two loans to expand the port--$524.5 million preferential export buyer's credit and $150 million concessional loan.  

Kenya Moving Forward with Chinese and Commercial Bank Loans to Finish Railway

 The International Railway Journal published on 21 May 2024 an article titled "Kenya Secures More Chinese Funding for Standard Gauge Railway" by Robert Preston.

Kenya has secured a commitment from the Export-Import Bank of China for a loan to fund the remaining sections of the Standard Gauge Railway from Naivasha to Malaba on the border with Uganda.  Kenya needs to confirm loans totaling an estimated $5.3 billion from commercial banks to complete the project.

Angolan President's Visit to China Had Debt High on Agenda

 The Angola Press News Agency published on 17 March 2024 an article titled "Angolan President Ends Official Visit to China."

The official Angolan press agency emphasized that President Joao Lourenco's visit to China focused on the need to renegotiate Angola's debt to China, which totals about $17 billion.  Of this total, about $12 billion is with the China Development Bank and China Export Import Bank, where the loan agreements contain "oil collateral and repayment clauses that overload" Angola's debt service capability. 

China and Angola signed 12 agreements to strengthen cooperation in sectors such as trade, agriculture, sustainable development, and digital infrastructure.  Some 30 Angolan companies participated in the Angola-China Business Forum. President Lourenco also visited Shandong Province.  He said the visit to China opened a new era in "bilateral cooperation and strategic partnership."   

Chinese Financing for Uganda Oil Pipeline Still in Question

 The East African published on 15 January 2024 an article titled "EACOP Partners Race against Time to Close $3bn Financing Deal with China Lenders" by Julius Barigaba.

Developers of the oil pipeline that will transport crude from western Uganda to Tanzania's port of Tanga remain hopeful but concerned about the willingness of China's Sinosure and Export-Import Bank to provide $3 billion in debt financing. Environmental activists have opposed the project, which would be the world's longest heated pipeline in order to permit the flow Uganda's low sulphur crude.  Western banks earlier dropped out of the project as a result of opposition by the activists.

French major TotalEnergies is the lead investor in the pipeline project with a 62 percent stake, the Ugandan government and Tanzania Petroleum Development Corporation each with a 15 percent stake, and China National Offshore Oil Corporation with an 8 percent stake.

Infographic on China's Loans to Africa

 Development Reimagined posted on 17 November 2023 an infographic titled "African Countries Bank Loans from China: Are Chinese Loans to Africa Back to Pre-Covid-19 Levels?"

This infographic contains a wealth of information on Chinese loans (past and present) to African countries.  It charts their growth and then decline in dollar value from 2001 through 2022, which countries are borrowing the most from Chinese banks, the number of African countries borrowing from China in any given year, the Chinese financial institutions providing the loans, the sectors financed by the loans, and the proportion of African debt that comes from China, France, the UK and US.

Comment:  The answer to the question "are Chinese loans to Africa back to pre-COVID-19 levels?" would seem to be a definitive "no" at least in terms of dollar value.  After reaching a high of $28 billion in 2016, China's loans to Africa fell to about $1 billion in 2020 and declined slightly more in 2021 and 2022.  Based on recent comments by Chinese officials, there is no indication that China intends to ramp up loans to Africa significantly in the next several years.  China's focus now is to finance projects that are "small and beautiful" or "small and smart."

China Restructures Its Global Infrastructure Initiative

 AIDDATA, a research lab at William & Mary, published in November 2023 a massive 393-page study titled "Belt and Road Reboot: Beijing's Bid to De-Risk Its Global Infrastructure Initiative" by Bradley C. Parks, Ammar A. Malik, Brooke Escobar, Sheng Zhang, Rory Fedorochko, Kyra Solomon, Fei Wang, Lydia Vlasto, Katherine Walsh, and Seth Goodman.  

The study concludes that Beijing's annual international development finance commitments--mostly other official flows (OOF) and much less overseas development assistance (ODA)--have not plummeted to nearly zero as some reporting has suggested. In spite of recent declines in lending, China remains the world's single largest source of international development finance.  China's ODA and OOF commitments to low- and middle-income countries are now hovering around $80 billion a year.  

Comment: the study is not, however, organized on a geographical basis and Chinese loans only to Africa have fallen to about $1 billion annually in recent years, down from a high of $28 billion in 2016.  The drop in Chinese loans has had a much greater impact on Africa than on the rest of the Belt and Road Initiative countries.  End Comment

By comparison, due in large part to the U.S. International Development Finance Corporation's financing of private sector projects, Washington now provides about $60 billion of development finance each year to low- and middle-income countries.  

In an effort to de-risk financing, China is ratcheting down its use of the policy banks--China Export Import Bank and China Development Bank--while ratcheting up its use of state-owned commercial banks, such as ICBC and Bank of China.  Beijing is putting in place increasingly stringent safeguards to shield itself from the risk of not being repaid.  Comment:  This accounts for much of the sharp drop in recent lending to countries in Africa.  

Kenya-China Ties: Infrastructure, Trade Deficits, and Debt

 Kenya's Business Daily published on 24 October 2023 an article titled "Treasury: What Kenya Got from China" by Kepha Muiruri.  

While Kenya has benefited from Chinese financing of major infrastructure projects, it means that China is the third largest holder of Kenya's external debt after the World Bank and Eurobonds.  An article on President William Ruto's attendance at the Belt and Road Initiative Forum in Beijing also charts Kenya-China trade since 2018, which documents a huge and consistent Kenyan trade deficit with China. 

China Shifts Focus on Belt and Road Initiative

 The South China Morning Post published on 23 October 2023 an article titled "China's Belt and Road Pivots to 'Small Yet Smart' Projects with 'Modest' US$107 Billion Financing Pledge" by Jevans Nyabiage.

China is refocusing the Belt and Road Initiative on "small yet smart" projects going forward.  The days of financing numerous, large infrastructure projects are over.  

China, Africa, and the Debt Service Suspension Initiative

 The China-Africa Research Initiative published in April 2023 a study titled "Integrating China into Multilateral Debt Relief: Progress and Problems in the G20 DSSI" by Deborah Brautigam and Yufan Huang.  

The study evaluates China's participation in a major multilateral experiment in sovereign debt management: the G-20s COVID-19 Debt Service Suspension Initiative (DSSI).  The authors argue, with some caveats, that the DSSI was a success.  

First, it succeeded in providing a pathway for China, the world's largest bilateral creditor, to negotiate debt treatments together with the Paris Club in the Common Framework.  Second, China fulfilled its role fairly well as a responsible G-20 stakeholder.  Finally, the DSSI pushed the Chinese government to align interests among fragmented banks and bureaucracies with conflicting goals.   

Is Chinese-financed Surveillance Eroding Democracy in Mauritius?

 The National Endowment for Democracy and International Forum for Democratic Studies published on 15 December 2022 a document titled "Smart Cities and Democratic Vulnerabilities," which contains a contribution (pages 11-17) titled "Is Digitalization Endangering Democracy in Mauritius?" by Roukaya Kasenally, University of Mauritius.

Over the last five years, Mauritius has experienced significant democratic backsliding.  Worrying trends include arbitrary arrests of journalists and other citizens, amendments to broadcasting and digital legislation, closures of certain private radio stations, the political weaponization of the police, and the weakening of key oversight institutions.  

Adding to this situation is the Mauritius Safe City Project (MCSP), one of more than twenty Huawei-backed smart or "safe" city projects across Africa.  In Mauritius, it involved the installation of 4,000 cameras with facial recognition and license plate recognition capabilities.  The author argues that the real intent behind the $455 million project financed by a loan from the Export-Import Bank of China remains unclear.  But critical questions about how the MCSP will affect Mauritian politics against the backdrop of the country's recent democratic backsliding are unanswered.    

More China-Kenya Railway Contracts Made Public

 The Nation published on 7 November 2022 the text of three contracts in connection with the financing of the standard gauge railway under the title "Read PDFs of SGR Contracts Released by Murkomen."  

The three contracts are the Mombasa-Nairobi SGR Buyer Credit Loan Agreement, Nairobi-Naivasha SGR Buyer Credit Loan Agreement, and Preferential Buyer Credit Loan Agreement.  The accompanying explanation said "details of the collateral Kenya put up--reported by the media, led by the Nation, as being the Port of Mombasa and other assets of the Kenya Port Authority--were missing."

Comment:  The collateral issue has been the most controversial aspect  of the SGR loan arrangements between Kenya and China.  It is not clear from this statement if the Nation stands by its earlier assertion that the Port of Mombasa is collateral in the event of default on the loan.  

The China Africa Research Initiative published a paper in April 2022 titled "How Africa Borrows from China: And Why Mombasa Port is Not Collateral for Kenya's Standard Gauge Railway."

Zambian Debt Deal Sidelines China

 The Diplomat published on 8 September 2022 a commentary titled "Zambia's New IMF Deal Shifts China to the Backseat" by Jade Scarfe, Development Reimagined.

China holds about 30 percent of Zambia's high external debt. Zambia has negotiated a zero-interest loan of $1.3 billion with a grace period of 5 and one half years and a maturity of 10 years from the IMF.  As a result, Zambia will shift spending priorities from public infrastructure, traditionally funded by China, to recurrent expenditures and cancel 12 planned projects, half of which were to be funded by China.  

China Cancels African Loans; Will It Matter Much?

 The Conversation published on 31 August 2022 a commentary titled "China Has Waived the Debt of Some African Countries. But It's Not about Refinancing" by Harry Verhoeven, Columbia University.  

China recently cancelled loans with 17 African countries.  It has not announced details of the cancellations, but the political significance is likely to be greater than the financial impact.  

Kenya's Presidential Election and China

 The Diplomat published on 25 August 2022 a commentary titled "What Kenya's Presidential Election Means for China's Belt and Road Initiative" by Erick Manga, consultant on international development, and Tristan Kenderdine, Future Risk.  

Kenya's rising debt burden is overshadowing its recent infrastructure projects built by China.  Following recent elections, President-elect William Ruto has promised to take far-reaching measures to address the debt situation.  This has important implications for China, which holds much of the debt.

Kenya: Sharp Rise in Debt Repayment to China and Fall in New Chinese Loans

 Kenya's Business Daily published on 20 May 2022 an article titled "Kenya's Debt Repayments to China Shoot to Sh73.5 Billion" by Constant Munda.

Repayments to China's Export Import Bank and the China Development Bank for infrastructure projects surged in the 9 month period ending in March and accounted for 81 percent of Kenya's total bilateral debt servicing.  In the last 2 years, there has also been a sharp drop in China's new lending to Kenya.