China wants its money back

Briefly: Hackers based in China targeted the Kenyan government in a years-long attempt to access data about the country’s debt, according to a Reuters report. China has denied involvement.

For the last couple of decades, Kenya has borrowed from China and others to fund major infrastructure projects like highways and railroads. But those projects haven’t boosted revenue enough to cover loan repayments.

Intrigue’s take: Several African governments struggling to meet repayments might be forced to cut back on essential investments to keep servicing their debt.

For its part, Kenya has taken extraordinary measures to pay back its debts, even temporarily suspending salaries for ministers, legislators, and civil servants.

And China seems to be taking extraordinary measures to enforce those debts. The reported hacking of Kenya’s government suggests real anxiety in Beijing that much of the $80B in outstanding debt across the continent may not be repaid.

Also worth noting:

  • Governments across Africa now spend around 17% of their revenues to service debt, with China the single largest bilateral lender.
  • Last month, Kenya’s top economic advisor tweeted, “Salaries or default? Take your pick”.
  • The IMF announced this week it’s agreed a $1B loan to Kenya. The IMF and China agreed to restructure Ghana’s debt earlier this month.