KENYA (Commonwealth Union) – With the world economy crashing on a regular these days, it seems that even super power countries who are well known to bail countries that are struggling out of their financial destitution is having trouble loaning them the needed money to help them out.
China is known for handing out loans and bail outs to many nations for as long as one can remember. There have been long term loan agreements with China and many other countries. However, the one that comes up today is the one between China and Kenya and how after 20 years of loans, China is taking a step back and reevaluating its position as one handing out these loans.
Now for the first time in 20 years China has started being a little more careful as to giving unlimited loans to Africa. It’s not because China doesn’t have the money, but it is speculated that it is because the default in the loans is too high. The fact that most African countries won’t be able to pay the loans back has helped China to make the decision to somewhat lower the number of loans given.
There was data that was taken from the treasury which showed very clearly that the loans had dropped by a large margin. This didn’t happen overnight. It had however been in the works for a few years as neither country wanted to lose their relations over the issue of loans. Although it was a difficult decision to be made, China made the decision that was right for their country.
The loans started dropping in mid-2002 and has continued to drop for the next 20 years as we are in 2022. This does not mean the loans stopped. China continued to give African countries loans. The value of the loan was what was decreasing. Nevertheless, this did not leave Africa destitute as other funding organizations such as the World bank and IMF stepped up and started lending money to African countries that needed.
