Kenya secured a $600 million loan from China last week to help towards paying for a $6 billion budget deficit that the government expects this year. The loan, one of many China has given to the country over the years, helps Kenya’s goal of bringing down its budget deficit to 7.9% of gross domestic product instead of the previously forecast 8.7%.
But it also raises the prospect of whether East Africa’s largest economy is growing too indebted to China. China is now Kenya’s largest creditor, accounting for 57% the country’s total external debt (pdf, p.37) of $4.51 billion, according to the World Bank. That figure has grown quickly. Chinese loans to Kenya grew an annual rate of 54% between 2010 and 2014 while loans from other lenders like Japan and France fell. Click here for more on this story.