China’s increasing capital resources have led to an aggressive expansion of its influence through infrastructure investments worldwide. Underdeveloped countries in Africa, facing capital shortages, have become primary targets for Chinese debt and equity. While these nations rely on China for trade, technology, and infrastructure development, their experiences working with Chinese entities have often turned sour.
One African nation experiencing a reality check is Kenya. Over the past decade, Kenya has established strong trade ties with China, heavily relying on imports to support its infrastructure projects. However, the trade balance heavily favors China, with Kenya’s imports from China accounting for 97%, while its exports to China represent a mere 3%. This trade disparity raises concerns about the long-term benefits and sustainability of their economic partnership.
Equitable bilateral relations face another challenge due to the dominance of large Chinese companies, often state-owned entities, in projects undertaken in Kenya. China Road and Bridge Corporation (CRBC), a state-owned company, is extensively involved in infrastructure projects across the country. However, the company has faced criticism for corrupt practices and discrimination against local communities, leading to public scrutiny of its projects. For instance, the construction of the Western Ring Road Project has drawn attention to its high cost and plans to impose excessive toll fees on Kenyans. Similarly, the Nairobi Metropolitan Services (NMS) has faced difficulties due to CRBC’s negligence in managing compliance issues, resulting in public inconvenience and accidents. It’s worth noting that CRBC was previously sanctioned by the World Bank for corrupt practices in the Philippines in 2009.
CRBC has also established a subsidiary, Africa Star Railway Operation Company Limited (AFRISTAR), to work on railway infrastructure in the region. However, the company has faced issues with the communications and information system it developed for the Kenyan Railway Corporation’s Standard Gauge Railway. Despite repeated requests for assistance from KR officials, AFRISTAR has shifted the blame onto KR, claiming that the corporation failed to ensure timely maintenance of the system. AFRISTAR is now demanding a substantial payment to undertake system maintenance for several years, raising concerns about the company’s commitment to its responsibilities.
AFRISTAR’s profit-driven approach has further intensified, as it now pressurizes KR authorities for an increase in freight rates for cargo clients. If its demands are unmet, the Chinese company may even threaten to halt operations, effectively holding the railway hostage. Such incidents add to the growing list of reasons why unchecked reliance on China for development comes with challenges. It highlights the need for Kenya and other African countries to prioritize transparency, balanced trade, and scrutiny of investment terms in Chinese proposals.
