The Chinese quest for economic colonialism is expanding in recent times with China quietly annexing assets of debt defaulting nations. This has resulted in management change of such companies to Chinese and unrestricted remittances of the revenues back home to China.
In recent times, China has been encroaching in the economies of third world countries with mouthwatering offer of loans. In West Africa, Nigeria and Ghana are already in their clutches, with Nigeria running to them in a bid to help revive their rail system.
Already, Zambia and Siri Lanka have handed over their Ports to China.
The latest of the victims of China’s brutal economic diplomacy is Kenya.
China has granted loans to Kenya for the development of Standard Gauge Railway, SGR, and Inland Container Depot in Nairobi. The trains were meant to haul cargoes to the Nairobi Dry Port. Currently, Nairobi has defaulted, and has been granted five years grace period which expires mid next year.
If China takes over, thousands of Dock Workers at the Mombasa port will be compelled to work under Chinese supervision, if they do not out rightly lose their jobs. Management changes will ensure that all revenues will be sent back home to China.
China’s terms and conditions are always such that the companies under question do not make enough to repay the loan, making it inevitable for an eventual takeover of such assets.
In the first year of operations, SGR lost 10 billion Kenya Shillings. Eventual takeover appears inevitable since all arbitration on the loan will be handled by China, according to the terms of agreement. Last month, an audit was completed of the deal, and it became obvious that the Kenya Ports Authority, which includes the Mombassa port, will not be able to pay for the loan.
“The China Exim Bank would become a principle in (over) KPA if Kenya Railways Corporation (KRC) defaults in its obligations and China Exim Bank exercise power over the escrow account security,” according to the Audit report quoted by African Stand, an Afrocentric Newspaper.
Two years ago, China took over the Hambantota port of Siri Lanka after they defaulted in their Loans. China now controls the port which lies close to India, china’ perennial trade rivals.
“The case is one of the examples of China’s ambitious use of loans and aid to gain influence around the world and of its willingness to play hardball to collect,” the New York Times of December 12, 2017 had reported.
Besides, the port appears to be a strategically positioned militarily. Last year, China took over Kenneth Kaunda International Airport, Zambia.
As it was annexing Siri Lanka port, it was extending loan facility to Botswana, while it warns about using their loans for “Vanity Projects”.
Nigeria has been at the forefront of loans agreement with China. But all loan negotiations were handled by President Muhammadu Buhari and politicians, without impute from economic experts. No reasonable economist ever traveled in the delegation.
Till date, the terms of the loan agreements have been shrouded in secrecy.
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