Kenya could lose assets to China over debt
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JOHANNESBURG – Global ratings company Moody’s Investor Service has warned that Kenya is among countries at the highest risk of losing strategic assets to China over the pile of debt it owes Beijing.
In its newly released report Moody’s said that China’s response to sub-Saharan African countries facing liquidity pressure had not been uniform or transparent – meaning predictability of credit implications were less clear.
“Countries rich in natural resources, like Angola, Zambia, and Republic of the Congo, or with strategically important infrastructure, like ports or railways such as Kenya, are most vulnerable to the risk of losing control over important assets in negotiations with Chinese creditors,” Moody’s warned.
Such countries are also at risk of being offered liquidity relief at higher resource concessions that only reduce the value of future export earnings, the East African reported on Tuesday.
“Even if debt restructuring alleviates immediate liquidity pressure, the loss of natural resources revenue or other assets is credit negative,” Moody’s said.