China steps up Africa charm offensive with Sh6 trillion loans

China announced a Ksh6 trillion financial package for Africa days after British Prime Minister Theresa May toured the continent on a business partnership offensive.

The loans, aid and investment package is the same amount Beijing pledged during the last FOCAC summit in 2015.

China’s President Xi Jinping announced this on September 3 during the Forum on China-Africa Cooperation (FOCAC) in Beijing which President Uhuru Kenyatta is currently attending.

The move by Beijing also comes days after US President Donald Trump hosted President Kenyatta in what analysts are calling The New Scramble for Africa.

This is likely to worry Kenyans who have in the last week seen a rise in fuel prices as the government tries to raise revenue amid a shortfall in collection by the Kenya Revenue Authority (KRA).

Kenya currently owes China Ksh534 billion, a significant amount of the Ksh5.1 trillion that the country owes local and international creditors.

READ: SAFARICOM EYEING NEW MEASURES IN SIM SWAP FRAUD FIGHT

In the current financial year Kenya will use 54% of its revenue to service debts.

More debt for SGR completion

Besides taking part in the Summit, President Kenyatta is scheduled to hold bilateral talks with President Jinping with the talks expected to focus on trade, infrastructure, investments, education and technology.

The President and his delegation are also expected to engage in advanced discussions on financing for Phase 2B of the Standard Gauge Railway (SGR) from Naivasha to Kisumu as well as the financing of the Western Bypass in Nairobi.

The Naivasha-Kisumu section is expected to increase cost of the whole SGR project to over Sh800 billion.

Phase one of the SGR running from Mombasa to Nairobi cost Ksh327 billion, while Section 2A (Kajiado to Naivasha) which is currently ongoing will cost Ksh150 billion.

SEE ALSO: CATHOLIC CHURCH INVESTS SH500 MILLION IN ELYSIAN RESORT

During the summit, President Kenyatta will also witness the signing of an Economic and Investment Cooperation Agreement between China and Kenya.

FOCAC is a meeting between Chinese government leaders and their African counterparts held after every three years.

This year’s summit will be attended and addressed by United Nations Secretary General Antonio Guterres and the African Union Commission Chairman Moussa Faki.