{Warning} Kenya’s crushing debt to China, threatens to lease its port of Mombasa to Chinese for 99+ years

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Jun 13, 2017
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Sri Lanka the latest victim of China’s debt-trap diplomacy

Beijing has been given a 99-year lease on Hambantota port as part of a debt-reduction deal, amid talk of creditor imperialism following China's buy-up of strategic ports in Piraeus, Darwin and Djibouti
By BRAHMA CHELLANEY DECEMBER 24, 2017 10:52 AM (UTC+8)
This month, Sri Lanka, unable to pay the onerous debt to China it has accumulated, formally handed over its strategically located Hambantota port to the Asian giant. It was a major acquisition for China’s Belt and Road Initiative (BRI) – which President Xi Jinping calls the “project of the century” – and proof of just how effective China’s debt-trap diplomacy can be.

Unlike International Monetary Fund and World Bank lending, Chinese loans are collateralized by strategically important natural assets with high long-term value (even if they lack short-term commercial viability). Hambantota, for example, straddles Indian Ocean trade routes linking Europe, Africa, and the Middle East to Asia. In exchange for financing and building the infrastructure that poorer countries need, China demands favorable access to their natural assets, from mineral resources to ports.

Moreover, as Sri Lanka’s experience starkly illustrates, Chinese financing can shackle its “partner” countries. Rather than offering grants or concessionary loans, China provides huge project-related loans at market-based rates, without transparency, and often little or no environmental- or social-impact assessments. As US Secretary of State Rex Tillerson said recently, with the BRI, China is aiming to define “its own rules and norms.”

To strengthen its position further, China has encouraged its companies to bid for outright purchase of strategic ports, where possible. The Mediterranean port of Piraeus, which a Chinese firm acquired for $436 million from cash-strapped Greece last year, will serve as the BRI’s “dragon head” in Europe.

By wielding its financial clout in this manner, China seeks to kill two birds with one stone. First, it wants to address overcapacity at home by boosting exports. And, second, it hopes to advance its strategic interests, including expanding its diplomatic influence, securing natural resources, promoting the international use of its currency, and gaining a relative advantage over other powers.

China’s predatory approach – and its gloating over securing Hambantota – is ironic, to say the least. In its relationships with smaller countries like Sri Lanka, China is replicating the practices used against it in the European-colonial period, which began with the 1839-1860 Opium Wars and ended with the 1949 communist takeover – a period that China bitterly refers to as its “century of humiliation.”

China portrayed the 1997 restoration of its sovereignty over Hong Kong, following more than a century of British administration, as righting a historic injustice. Yet, as Hambantota shows, China is now establishing its own Hong Kong-style neocolonial arrangements. Apparently Xi’s promise of the “great rejuvenation of the Chinese nation” is inextricable from the erosion of smaller states’ sovereignty.

Just as European imperial powers employed gunboat diplomacy to open new markets and colonial outposts, China uses sovereign debt to bend other states to its will, without having to fire a single shot. Like the opium the British exported to China, the easy loans China offers are addictive. And, because China chooses its projects according to their long-term strategic value, they may yield short-term returns that are insufficient for countries to repay their debts. This gives China added leverage, which it can use, say, to force borrowers to swap debt for equity, thereby expanding China’s global footprint by trapping a growing number of countries in debt servitude.

Even the terms of the 99-year Hambantota port lease echo those used to force China to lease its own ports to Western colonial powers. Britain leased the New Territories from China for 99 years in 1898, causing Hong Kong’s landmass to expand by 90%. Yet the 99-year term was fixed merely to help China’s ethnic-Manchu Qing Dynasty save face; the reality was that all acquisitions were believed to be permanent.

Now, China is applying the imperial 99-year lease concept in distant lands. China’s lease agreement over Hambantota, concluded this summer, including a promise that China would shave $1.1 billion off Sri Lanka’s debt. In 2015, a Chinese firm took out a 99-year lease on Australia’s deep-water port of Darwin – home to more than 1,000 US Marines – for $388 million (A$506m).

Similarly, after lending billions of dollars to heavily indebted Djibouti, China established its first overseas military base this year in that tiny but strategic state, just a few miles from a US naval base – the only permanent American military facility in Africa. Trapped in a debt crisis, Djibouti had no choice but to lease land to China for $20 million per year. China has also used its leverage over Turkmenistan to secure natural gas via a pipeline largely on Chinese terms.

Several other countries, from Argentina to Namibia to Laos, have been ensnared in a Chinese debt trap, forcing them to confront agonizing choices in order to stave off default. Kenya’s crushing debt to China now threatens to turn its busy port of Mombasa – the gateway to East Africa – into another Hambantota.

These experiences should serve as a warning that the BRI is essentially an imperial project that aims to bring to fruition the mythical Middle Kingdom. States caught in debt bondage to China risk losing both their most valuable natural assets and their very sovereignty. The new imperial giant’s velvet glove cloaks an iron fist – one with the strength to squeeze the vitality out of smaller countries.

Source:

Sri Lanka the latest victim of China’s debt-trap diplomacy



NASHAURI:
Tujifunze kwa makosa yaliyotendwa na wengine na tufanye maamuzi SAHIHI.
Tuwe macho na hii mikopo laini ya Wachina. Na hata Makubaliano ya Bandari ya Bagamoyo yaangaliwe kwa Ueledi mkubwa kwani inaweza leta madhara makubwa kwa Bandari za Tanga, DSM na Mtwara.
 
duuu collateralized project loan!!!???
how???
is it project finance or corporate finance??
 
Pesa ya mchina kidogo sana... Huyo twaweza mlipa na miaka tatu akitaka na maisha isonge mbele.
 
Hio sijui we Katoa wapi... Lakini deni letu lisikutie shaka. We average 400 billion payments per year so do the math.
Mimi sina shaka na deni, wasiwasi wangu ni wale wanaokufa kwa njaa, vipi msiwanunulie chakula kama pesa ipo?, ni aibu kutegemea food donation miaka 54 baada ya kupata uhuru.
 
Mimi sina shaka na deni, wasiwasi wangu ni wale wanaokufa kwa njaa, vipi msiwanunulie chakula kama pesa ipo?, ni aibu kutegemea food donation miaka 54 baada ya kupata uhuru.
Labda utwambie food donation ni gapi. Kenya does not ask for donations. Na BTW the last two years were drought filled. But necessity is the mother of invention. Now we are motivated to look for solutions to the problem.
 
Terace Huyo mwandishi amefanya tu correlation kwasababu pia Kenya iko na deni la mchina, lakini same situation haiwezi ikafanyika Kenya.

1. Deni la Kenya si lote ni deni la mchina, denila mchina ni kama 40%, hio tunaweza kumlipa.
2. Mwandishi alikosa au kusahau au alikusudia kit flani, Bandari ya Mombasa ina deni la Mjapani, kwahivyo iwepo Kenya itashindwa kulipa deni, kisheria ni mjapani ndo atadai bandari manake wametukopa $500million a kupanua bandari ya Mombasa

2015
Japan will on Friday advance to Kenya a Sh25 billion loan to fund the second phase of Mombasa port expansion.
The money, to be given through the Japan Bank for International Corporation (JBIC), is earmarked for the construction of a new container terminal by reclamation of the West Kipevu to create an additional 3 berths.
“The proposed project includes construction of a new port access road connecting the new container terminal with the existing Port Reitz Road that leads to Nairobi and inland bound highways,” the project document reads.
The money is part of Sh50 billion commitment by the Government of Japan to fund development of the facility.
Kenya signs Sh25 billion deal with Japan for Mombasa port


Oct,2017
The governments of Kenya and Japan have signed a Sh35 billion loan facility for construction of phase two of the second container terminal at the port of Mombasa – paving the way for the launch of a project that seeks to boost efficiency at the busy port.
According to the Kenya Ports Authority managing director Catherine Mturi, the signing of the deal will enable the contractor to kick off works on site by January next year.
“We already have the Sh35 billion financing from the Japanese government. We are now in the tendering process but construction must commence by January 2018,” Ms Mturi said in an interview last week.
https://www.trademarkea.com/news/japans-lends-kenya-sh35bn-for-mombasa-port-expansion/


Tena isotoshe, pesa za mjapani ndo inajenga indutrial zone pale mombasa ambayo itatumia hilo bandari kufanya export, Kwahivyo japani ako na lng term plans na hilo bandari

Kenya has secured Sh27.3 billion from Japan to construct an industrial and commercial hub in Dongo Kundu, Mombasa.
The first phase of the Special Economic Zone (SEZ), which is expected to alter the coastal town in terms of infrastructure and business, is scheduled to be ready by 2019.
An agreement signed by the governments of Kenya and Japan on the sidelines of the Tokyo International Convention on Africa Development (Ticad) shows that of the Sh27.3 billion ($269.9 million), Sh21.36 billion is a long term soft loan while Sh5.969 billion is a grant.
“The Government of Japan will finance the basic infrastructure of phase one through a concessional loan of US$210.8 million and grant assistance of US$58.9 million,” the MoU says.
https://www.nation.co.ke/business/K...Port-Expansion/996-2590674-qd1guwz/index.html






Kwaahivyo mchina hana kitu hapo, kile ambacho anaweza kukichukua ni hiyo SGR ambapo deni kubwa linatokea hapo.... but it will never come to that, we have always payed back or debts!
 
Si Tanzania ilisha surrender Bagamoyo kwa wachina, Hamtamiliki hata theuthi moja ya hilo bandari


Tanzania surrenders Bagamoyo port project to Chinese firm
Financial constraints have forced Tanzania to miss out on ownership of the $10 billion Bagamoyo Port and Special Economic Zone project.

Under a three-way partnership signed with Oman and China in 2013, Tanzania was to get an undisclosed shareholding in the project by dint of raising $28 million for compensating landowners who were to be displaced.

But the government managed to raise only $1.5 million and compensated a few of the 2,180 registered residents of the area earmarked for the project. There are other owners of large tracts who do not reside in the area and are yet to be registered for the compensation.

With investors anxious of losing the business opportunities envisaged from the project, the government is now negotiating with the investment partners for them to fund the compensation of land owners. In turn, the government will forego an equity stake in the project and only benefit from taxes on the land and occupancy by the investors.

Minister for Industries and Trade Charles Mwijage told The EastAfrican that the discussions with investment partners also revolve around the legal framework to ensure there would be no conflict between them and the Bagamoyo community.

China Merchants Holdings International (CMHI), a port management firm, is understood to be ready to raise money for the compensation. CMHI managing director Hu Jianhua said in a statement two weeks ago that the company would run Bagamoyo as one of its overseas ports.

“We had not abandoned this project. We were waiting to compensate the people whose land was taken for development of various business programmes,” he said.

CMHI said in its report that the Bagamoyo SEZ is part of its global investments. In Africa, the Chinese company has invested in Kenya, Ethiopia, Togo, Nigeria and Djibouti.


The Bagamoyo project framework agreement was signed on March 24, 2013 to enhance competition along the EastAfrican coast and supplement the Tanzanian ports of Dar es Salaam and Mtwara.

Retired President Jakaya Kikwete touted the project during his term, vowing to construct Tanzania’s biggest port at the former slave harbour with funding from Oman and China.
However, when President John Magufuli came to office in 2015, the project took a backseat as the government prioritised improvements of Dar es Salaam, Mtwara and Tanga ports.

The Bagamoyo port and its affiliate industrial zone is meant to address congestion at the old port and support Tanzania to become East Africa’s leading shipping and logistics centre. The port is located about 75 kilometres from Dar es Salaam and 10 kilometres from Bagamoyo town.

Some 190 industries have been marked for development within the SEZ. When fully developed, the Bagamoyo SEZ will attract about 700 industries to become a strategic investment zone in East Africa.

CMHI said among the projects envisaged in the Zone are industrial parks worth $120 million, a $70 million tourism Park, free port facilities ($ 90 million), free trade zone ($70 million), Science and Technology parks ($ 50 million), International business centre ($70 million) and industrial sheds costing $20 million.
Dar surrenders Bagamoyo port project to Chinese
 
Kafrican
Misleading headline from misleading Kenyan paper, mmezowea kulishwa maneno ya sio na ukweli. Tanzania haija surrender kitu chochote. Tanzania imekataa kujingiza kenye madeni ya sio na kichwa wala mguu. Wachina wanataka kutufanya kama ni sisi ndio tunashida ya hiyo badari ya Bagamoyo, lakini in return ni wao ndio wanashida. Kenya mmebebwa kichwa-kichwa na kushawishiwa kama ni Kenya ndio inataka SGR, lakini kiukweli ni mchina ndio mwenye shida ya kujenga ajira na kupanua masoko ya watu wake.

Kama kweli wachina wanaitala bagamoyo port, watafute hela yao wajenge. Tutakuja kujadiliana nao kwenye umiliki na kodi. Kama usipojenga miundo mbinu kwa pesa ulioitolea jasho mwenyewe, kila siku utakuwa mtumwa.
 
Kwani China anatudai pesa ngapi ndo tushindwe kulipa??deni lote la Kenya ni around $40b of which around 50% ni from local lenders.... This financial year the government has allocated $6.2b to pay some of it's loans...deni la China tunaeza funga macho tujinyime mwaka moja na tulilipe na mwaka moja..tena China hawana shares zozote Mombasa port itakua vipi watake control of the port?tuache ushabiki wa kijinga
 
Kwani China anatudai pesa ngapi ndo tushindwe kulipa??deni lote la Kenya ni around $40b of which around 50% ni from local lenders.... This financial year the government has allocated $6.2b to pay some of it's loans...deni la China tunaeza funga macho tujinyime mwaka moja na tulilipe na mwaka moja..tena China hawana shares zozote Mombasa port itakua vipi watake control of the port?tuache ushabiki wa kijinga
Acha kujipa matumaini ya uongo, Kenya sio tu haina uwezo wa kulipa hilo deni, bali hata uwezo wa kuendelea na ujenzi wa phases zilizobaki kwa kutumia pesa zake bado haina uwezo, Kenya itaendelea kukopa ili reli iweze kufika Kisumu na bandari ziweze kujengwa, hilo deni litaendelea kuwa kubwa, na kama hakutokuwa na biashara nzuri, kamwe deni hamtoweza kulilipa, Kenya itakuwa kama Srilanka. Kama kweli mnao uwezo wa kulipa, kwanini msiamue kujenga kwa pesa zenu ili deni lisiendelee kuwa kubwa?

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