KENYA’S Treasury Cabinet Secretary Ukur Yattani denied, again, on Monday that the Port of Mombasa could be handed over to China in the event that Kenya Railways is unable to repay its SGR debt. Yattani responded to a front-page story in The Star newspaper that claimed Kenya’s Auditor General Nancy Gathungu maintains the port is indeed at risk of forfeiture.
The Star report claimed that Gathungu submitted a report to Parliament alleging that Kenya waived its sovereign immunity in the event of a default on the $2.4bn loan. The issue of a similar sovereign immunity clause in a Chinese loan contract was also a very big concern last year in Nigeria.
Yattani echoed scholars and other experts who have long maintained that Kenya is not at risk of ceding the Port of Mombasa to China in the event of a default. It’s also worth noting that Kenya Railways already failed to make a $365 million payment last year and there’s been no indication that the China Exim Bank has sought redress through any of the contract’s punitive measures.