Chinese envoy: Beijing has tried its best to meet Kenya's request on loans

The Chinese Ambassador to Kenya Zhou Pingjian arrived in Nairobi on August 31 and presented his credentials to President Uhuru Kenyatta two days later.

The quick accreditation signifies the high importance that Nairobi attaches to Beijing, which is now Kenya’s largest bilateral lender.

Yet, China’s growing influence in Nairobi over the past two decades now faces closer scrutiny as concerns rise over Kenya’s ability to repay its mounting debts, and the growing trade imbalance with the world’s second-biggest economy.

As China marks 57 years of diplomatic relations with Kenya this month, Mr Zhou, spoke to the Nation on pertinent issues of interest between the two countries.

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Q. China, this month, marks a significant milestone in diplomatic relations with Kenya. What would you say has been the most outstanding benefit from this association?

A. China and Kenya share a long friendship. The greatest Chinese navigator Zheng He made seven voyages overseas 600 years ago between 1405 and 1433. For four times his large fleets visited the east coast of Africa. Since the establishment of diplomatic ties on December 14, 1963, particularly in recent years, China and Kenya have forged a strong partnership of equals. Our fruitful and wide-ranging practical cooperation stands out in China-Africa cooperation, delivering solid benefits to the people of both countries. China and Kenya have become a community of shared interests and future.

Our cooperation and mutual assistance in the fight against Covid-19 represents a prime example of solidarity. When China faced its most difficult moment, we received invaluable material and spiritual support from our Kenyan brothers and sisters, something we will never forget. When the pandemic broke out in Kenya, China was among the first to offer help. We shared our experience without reservation and sent multiple tranches of medical supplies to Kenya to the best of our ability.

During the ongoing pandemic, the Mombasa-Nairobi SGR plays an even more significant role in the transportation of cargo especially essential medical supplies. It testifies to the high value of China-Kenya cooperation.

Let me mention a few more in the long list. The project of access to satellite TV is starting to benefit 16,000 rural households and 2,400 public institutions in all 47 counties across Kenya. The vocational training project has approached more than 140 Kenyan schools. Garissa solar plant, the largest grid connected solar power plant in East and Central Africa, having created about 1,000 jobs during the construction period, is meeting power demand of 350,000 people or about 50 per cent of the population in Garissa. And the Nairobi expressway (which is) under construction as a PPP (public-private partnership) project, the Global Trade Centre, Nairobi, etc.

Recent years have witnessed a rapid growth of China-Kenya ties across the board. Take tourism. Over 80,000 Chinese citizens visited Kenya in 2019, increasing from some 1,000 travellers in 2000 and 30,000 in 2010. On bilateral trade, the volume reached more than USD5 billion in 2019, from just USD100 million in 1999.

Going forward, we have every confidence that China and Kenya will work together to bring more benefits to our peoples. China has just laid out its 14th five-year plan (2021-2025) for national economic and social development and the long-range objectives through the year 2035. China’s new development and huge domestic demand will continue to unleash endless potential for the whole world including Kenya. There is no doubt that we can synergise China’s 14th Five-Year Plan with Kenya Vision 2030 and the Big Four agenda so as to achieve a win-win development.

You said recently that a positive media narrative can help boost relations between China and Africa in general. Was this just about opposition to Western media or is there a specific area you think has been missing in media reporting on China-Africa relations?

I don’t want to belabour the point, but it’s well known that both China and Africa face the common challenge of negative publicity. Africa’s image is often portrayed as a region afflicted with chaos, poverty and disease by the international media. I know that isn’t the Africa I see with my own eyes; not the whole picture, to say the least. We always encourage media houses in China to tell Africa as it truly is. And you know all those bad name labels hurling at China on a regular basis. Opportunities abound in China-Africa cooperation. We should tell the China story, the Africa story, and the China-Africa cooperation story well so we won’t be misled or distracted by those unfair and untrue negative publicity.  Nairobi is such an important media hub in Africa that most major Chinese media houses set their African headquarters here. It’s my sincere hope that Chinese and Kenyan media can work together more closely and constructively to facilitate deeper and wider mutual understanding between the two peoples.

China is now one of the biggest financiers of infrastructure projects in Kenya. But it is also one of the biggest creditors to Kenya. Is Beijing worried about Kenya’s ability to repay the loans, given that these concerns have already attracted downgrades in sovereign credit ratings?

Infrastructure development is a priority area for China-Africa cooperation. China has built more than 6,000 kilometres of railway and roads respectively in Africa, developed nearly 20 ports and more than 80 large power facilities in Africa, which has brought significant changes to Africa’s economic and social development. Without appropriate financing arrangement, we would not have come this far.

Kenya has been making steady and significant progress in addressing infrastructure deficit in recent years. We are proud that some major infrastructure projects including the flagship SGR are in partnership with China. All the loans from China are project-specific based on equal-footed consultation and mutually beneficial cooperation. The fruitful and tangible outcomes of China-Kenya financing cooperation are solid, there for all to see.

As for the loans, China is Kenya’s leading bilateral lender at Sh750 billion. The loans attract an annual interest rate of about three per cent. Twenty percent of Kenya’s total external debts are from china, roughly. Kenya’s internal debts attract an average yearly interest of 11 per cent, according to a Daily Nation report dated December 3, compared to 4.2 percent for external debt. I should say that China, as a developing country, has tried its best to meet Kenya’s request.

 China attaches great importance to debt suspension and alleviation in Africa and is committed to fully implementing the G20 Debt Service Suspension Initiative (DSSI). China stands ready to strengthen communication and coordination with Kenya and resolve the debt issue through friendly consultation.   

Do we expect the Chinese government to alter the way it finances or lends money to Kenya or other sub-Saharan African countries given the noise about possibility of debt burden?

China has provided debt relief worth USD2.1 billion to lower-income countries under the G20 framework, the highest among G20 members in terms of deferral amount. As official bilateral creditors, the China International Development Cooperation Agency and the Export-Import Bank of China have implemented all eligible debt suspension requests of the developing nations. The total debt service payments suspended amounts to USD1.353 billion, with 23 countries benefiting from the initiative. The China Development Bank, as a commercial creditor, has also responded to the G20 debt relief initiative, and signed agreements with beneficiaries involving USD748 million.

China supports the decision on DSSI extension and will continue to work with other parties for its full implementation. Meanwhile, China will increase the level of debt suspension and relief for countries facing particular difficulties and encourage its financial institutions to provide new financing support on a voluntary basis and according to market principles. 

There has been a rush for Covid-19 vaccine preparations. What is China’s status of vaccine making and could Kenyan and African countries benefit from that?

On vaccine research and development, China accords the highest priority to safety and effectiveness and strictly abides by international laws and norms. Leading the world in both quantity and progress of the vaccine, China has developed five vaccines which have entered phase III of clinical trials. Nine other vaccines have entered clinical trials. Emergency use and preparation for the production of the vaccines are progressing smoothly in China.

China has joined the Covax facility, a platform on which we will share vaccines with other countries, developing countries in particular. China earnestly acts on its firm commitment to making vaccines a global public good accessible and affordable to people around the world, particularly African and other developing countries. Once our Covid-19 vaccines are developed and deployed, we will actively consider providing them to African countries in need, as a concrete measure to help our African friends defeat the virus at an early date.

It is almost three years since the last FOCAC Summit which pledged USD60 billion to African economies. What role does China intend to play in helping the Kenyan economy rise from Covid-19 challenges, ahead of the next FOCAC meeting in 2021?

This year marks the 20th anniversary of the founding of Forum on China Africa Cooperation (FOCAC). Over the past two decades, the FOCAC has grown into an effective mechanism for practical cooperation, and represents an important flag for South-South cooperation. Over 70 per cent of the USD60 billion of financing support pledged by China at the FOCAC Beijing Summit has been either delivered or appropriated. The Phase І of the Nairobi-Malaba railway is testimony to this work in progress. In the first 10 months of this year, China-Africa trade reached USD150 billion. China is on track to becoming Africa’s largest trading partner for the 12th year running.

The next FOCAC meeting is scheduled to be held next year in Senegal. We hope the meeting will create greater synergy between China’s second centenary goal and the AU’s Agenda 2063, form new consensus on China-Africa solidarity, explore new cooperation areas, and bring new benefits to the Chinese and African peoples.

China has always viewed and developed its ties with Kenya from a strategic and long-term perspective. China will work with Kenya to take forward Belt and Road cooperation and the implementation of the outcomes of the FOCAC Beijing Summit and the Extraordinary China-Africa Summit on Solidarity against Covid-19, and in that context, strive for new progress in the China-Kenya comprehensive strategic and cooperative partnership and deliver greater benefits to the people of both countries.