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China vows to help Kenya deal with its debt challenges

"China attaches great importance to debt suspension and alleviation in African countries including Kenya," the embassy said in a statement.

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China promises to help Kenya deal with its debt challenges www.bamcos.co.ke

China has promised to help Kenya deal with its debt challenges, the Chinese Embassy in Kenya has said.

In a statement on Monday, the Embassy said that it is holding “smooth” talks over the issues, even as a number of debts fall due.

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“China attaches great importance to debt suspension and alleviation in African countries including Kenya,” the statement read in part.

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The statement reveals that China has signed debt service suspension agreements with 12 African countries and provided waivers of a matured interest-free loan for 15 African countries under the G-20 debt service suspension initiative.

Kenya owes China Exim Bank $1.4 billion (Ksh140 billion) used to build the Nairobi-Naivasha Standard Gauge Railway (SGR) and the five-year holiday offered is set to expire on Thursday, January 21, 2021.

Kenya currently pays $1 million (Ksh100 million) every month to China’s Africa Star Railway Operation Company to run the Nairobi – Mombasa SGR, but the government has been negotiating to have the amount reduced to $600,000 (Ksh60 million).

Kenya’s debt obligation to China is set to increase to KSh84.3 billion this financial year, then later Ksh111.4 billion in the financial year 2021/2022.

Last week, Kenya secured a debt repayments relief deal with the Paris Club of international lenders and it is seeking further relief from non-Paris Club bilateral creditors, Reuters has reported.

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