Unfathomable Decision: Kenya Chooses IMF and World Bank Amidst China’s Vice-Like Hold on Financing African Nations!
The administration of Kenya’s President William Ruto will only be receiving a meager $12.7 million from China this financial year, the lowest amount in over a decade. China has become more cautious in lending to African countries facing debt stress, which has prompted President Ruto to seek loans from the World Bank and International Monetary Fund (IMF). As a result, the IMF and World Bank Group will now have a strong hold on Kenya’s economy. China had previously been a major lender in infrastructure development for Kenya, but the new commitment for the fiscal year starting July is far less than what is expected from other lenders such as the World Bank, France, and Germany. The Ruto administration has committed to reducing borrowing rates, with foreign loans decreasing to $2.3 billion from the current $2.4 billion. Kenya’s debt surged under the previous administration, leaving the country at high risk of debt distress according to the IMF. In response, Chinese lenders have adopted increasingly hard-line lending terms. This reduced funding to African countries could be an indication that Beijing is starting to see reduced benefits from its investments on the continent.