China owns 21.3% of Kenya’s external debt – not 70% as reported


China now owns more than 70% of Kenya’s external debt

Source: Quartz news website (July 2018)



Explainer: China owns 21.3% of Kenya’s external debt

  • Raising concerns about Kenya’s international borrowing, news website Quartz said China owned 72% of the country’s external debt.
  • National treasury data shows Kenya owes China 72% of its bilateral debt.
  • But bilateral debt is just a part of a country’s external debt. China owns only 21.3% of Kenya’s external debt.

UPDATE: After we published this fact-check, Quartz corrected its story. The 70% debt load owed by Kenya to China was bilateral debt and not external debt, it said. In addition, it also clarified the difference between these two types of borrowing.

Worried about being up to its ears in debt, Kenya’s government wants to hire experts to manage its borrowing, local media has reported.

Much of Kenya’s borrowing in recent years has been from China, US-based news website Quartz said in a July 2018 article.

But the country’s obligations to Beijing run “much deeper than many ordinary Kenyans realise” the article said under the headline: “China now owns more than 70% of Kenya’s external debt”.

Does China account for nearly three-quarters of the money Kenya owes foreign lenders?

Data from Kenyan treasury

Quartz said its source was an article in the Nairobi-based Business Daily newspaper that cited data from Kenya’s treasury.

Business Daily shared with Africa Check the documents it relied on for its article. These are official statistics that provide more information on the 2018/19 Kenyan budget statement.

They showed that as at 31 March 2018, Kenya owed China KSh534.1 billion, or 72% of the country’s total bilateral debt of KSh741 billion.

Bilateral debt generally refers to debt loaned by one state to another state, Odongo Kodongo,  a financial economist who has researched Kenya’s debt, told Africa Check. An example would be Kenya borrowing from Uganda. Kodongo is an associate professor at Wits University’s business school.

It therefore is not issued to private sector lenders such as banks, he added.

Share of bilateral debt held by China is accurate

Three experts told Africa Check that China’s share of Kenya’s bilateral debt – of more than 70% – was accurate.

Kodongo agreed, as did Duke Center for International Development director Indermit Gill and research associate Kenan Karakülah.

Gill and Karakülah said they crosschecked the newspaper’s data against that of the Central Bank of Kenya, while Kodongo used March 2018 data from Kenya’s treasury.

Bilateral debt is one part of external debt

But while it may be true for bilateral debt, it’s not true for all of Kenya’s foreign debt. Bilateral debt is just one of three components of external debt, Gill and Karakülah said.

External debt is the total public and private debt that a country owes foreign creditors, they explained. It “covers bilateral debt, multilateral debt and commercial debt. Therefore, Quartz’s article misinterprets [this] fact”.

Multilateral debt is owed to international financial institutions such as the African Development Bank, the World Bank and the International Monetary Fund, the two researchers said. Commercial debt is owed to commercial enterprises or banks.

“All bilateral debt [is] external debt but not all external debt [is] bilateral debt,” Kodongo said. External debt also includes privately held international debt such as Eurobonds.

It is therefore “not accurate” to say that China holds more than 70% of Kenya’s external debt, Kodongo said.

So, what is China’s share of Kenya’s external debt?

By Gill and Karakülah’s calculations, Kenya’s external debt as at 31 March 2018 was KSh2.51 trillion. It was made up of:

  • Multilateral debt: KSh832.22 billion
  • Commercial debt: KSh799.19 billion
  • Bilateral debt: KSh741.04 billion
  • Guaranteed debt (that the government has agreed to pay for other parties in case they default): KSh140.04 billion

China’s share of Kenya’s external debt is therefore KSh534.07 billion of KSh2.51 trillion.

“Kenya’s debt to China is [thus] 21.3% of Kenya’s external public debt,” the researchers wrote in an email.

Why debt levels matter

Borrowing is useful if it is for investment and not consumption, experts told Africa Check.

How much a country produces and exports matters more than absolute debt levels, Odongo Kodongo, an associate professor at Wits University’s business school, said. This is because these are better indicators of a country’s ability to repay.

The terms of the debt – its interest rate and repayment period – are also significant, Duke Center for International Development director Indermit Gill and research associate Kenan Karakülah said.

It’s important to note that while Kenya’s external debt to China almost doubled between 2015 and March 2018, in the same period the country’s commercial debt grew faster, they added.

Conclusion: China holds just over 20% of Kenya’s external debt, not 70%

In an article drawing attention to what it said was Kenya’s rising public debt, US-based website Quartz said “China now owns more than 70% of Kenya’s external debt”.

It cited treasury data used in an article by Business Daily, a Kenyan newspaper.

But the data shows China holds just over 20% of Kenya’s external debt. We therefore rate this claim as incorrect.

Edited by Lee Mwiti

Want to know why we fact-checked this claim? Read about it in our explainer.



Further reading:

© Copyright Africa Check 2020. Read our republishing guidelines. You may reproduce this piece or content from it for the purpose of reporting and/or discussing news and current events. This is subject to: Crediting Africa Check in the byline, keeping all hyperlinks to the sources used and adding this sentence at the end of your publication: “This report was written by Africa Check, a non-partisan fact-checking organisation. View the original piece on their website", with a link back to this page.

Leave a Reply

Your email address will not be published. Required fields are marked *


Africa Check encourages frank, open, inclusive discussion of the topics raised on the website. To ensure the discussion meets these aims we have established some simple House Rules for contributions. Any contributions that violate the rules may be removed by the moderator.

Contributions must:

  • Relate to the topic of the report or post
  • Be written mainly in English

Contributions may not:

  • Contain defamatory, obscene, abusive, threatening or harassing language or material;
  • Encourage or constitute conduct which is unlawful;
  • Contain material in respect of which another party holds the rights, where such rights have not be cleared by you;
  • Contain personal information about you or others that might put anyone at risk;
  • Contain unsuitable URLs;
  • Constitute junk mail or unauthorised advertising;
  • Be submitted repeatedly as comments on the same report or post;

By making any contribution you agree that, in addition to these House Rules, you shall be bound by Africa Check's Terms and Conditions of use which can be accessed on the website.


This site uses Akismet to reduce spam. Learn how your comment data is processed.