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Report casts doubt on Chinese debt-trap threat to Kenya’s Mombasa port
- The Kenyan auditor general had warned that port could be seized if the country fell behind in its loan repayments for a railway
- But researchers in the US say the port was not collateral and its seizure never sought
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When the alarm was raised more than three years ago in Kenya, the warning was dire.
The country’s auditor general, who inspects the financial books of state entities, said Kenya could be made to surrender control of its port in Mombasa if it defaulted on a US$3.6 billion loan from China used to build the Mombasa-Nairobi Standard Gauge Railway (SGR).
The warning came as speculation mounted that China had deliberately indebted Sri Lanka to seize its Hambantota port.
The Chinese and Kenyan governments both denied that Mombasa port was collateral for the loan but offered no explanation, leaving the exact terms of the contract shrouded in secrecy.
But a report released on Thursday by the China Africa Research Initiative (CARI) at the Johns Hopkins University School of Advanced International Studies said the auditor general was wrong to conclude that the port had been used as collateral for the railway loans.
The warning was based on a misunderstanding of the “waiver of sovereign immunity” clause, a term that can also be found in other infrastructure contracts on the continent, according to the report.
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