China: Inroads to Kenya, “It’s a Long Road that has No Turning”

Ron Schramm

    Research output: Other contributionCase Studies

    Abstract

    In Kenya, there was almost universal praise for the infrastructural work undertaken by China, whose help meant more progress (including roads, bridges, power plants and power transmission construction) since 2006 than in all the years prior going back to Kenya’s founding in 1963. Meanwhile, like quite a few other African countries, Kenya was an emerging market with some core assets, yet it had generally received abysmal credit ratings and had oftentimes been shunned by the international community as a place too risky to invest in. Therefore, China needed to consider carefully its vast investment and lending program for the country and especially the intensive efforts of Chinese construction firms in Kenya. This case describes the history of the China-Kenya relationship and the economic ties and cooperation between the two countries, the road projects in Kenya and the Chinese companies involved, Export Credit Agencies (ECAs) and Chinese group of agencies’ involvement, OECD rules, China’s loan terms in Kenya and the role of oil, and other issues. The case also identifies potential sources of market failure and/or potential defaults to be considered from the perspective of Chexim (China’s export credit agency), and examines whether China’s engagements in Kenya were appropriate when seen from a broad financial perspective.
    Original languageEnglish
    Number of pages22
    Publication statusPublished - 1 Jan 2012

    Case number

    ECO-14-116

    Case normative number

    ECO-14-116-CE

    Case type

    Library

    Update date

    2016-06-17

    Published by

    China Europe International Business School

    Keywords

    • Africa
    • Bank Loan
    • Credit Rating
    • Default Risk
    • Kenya

    Case studies discipline

    • Economics
    • Accounting

    Case studies industry

    • Construction

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