Impact of China‟s Monetary Aid on Kenya‟s Public Debt Stock
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Date
2021-10
Authors
Nyaberi, Siocha Justin
Ichani, Francis
Omagwa, Job
Journal Title
Journal ISSN
Volume Title
Publisher
IJRISS
Abstract
t: The purpose of the study was to examine the impact of
China’s Monetary Aid on Public Debt. The key literature
reviewed from various sources showed that a number of China’s
monetary aid in form of concessional loans, grants and interest
free loans had great impact on the public debt many SubSaharan African countries, Kenya being the classic example
under study. Realism theory was used to theoretically analyse the
study in the behaviour of China’s aid to Kenya as largely selfseeking. The study adopted an exploratory research design. The
target population was limited to two Kenyan government
ministries, IR scholars and economic experts and the embassy of
the Peoples’ Republic of China in Kenya, the total population
under study was 700. This study applied purposive sampling
technique in selecting a sample size of 70 respondents.
Documents, questionnaires and interviews were used to collect
data. The study found that monetary aid from China as
concessional loans, grants and interest free loans have direct
positive impact on the Kenya's public debt to a large extent when
measuring it through the real GDP growth. The study findings
established that China’s aid in form of concessional loans do not
only come with a tag of ‘zero-or-no interest loans but also are
attractive for their non-conditionality to the recipient countries
hence preferred to those others from OECD-DAC which have
constant regulations. The study recommended that the
government of Kenya to reduce its external borrowing and
embrace savings, external debts require consistence debt
servicing unlike debts from domestic borrowing. The study
further recommended that Kenya should reconsider its
competitive advantage in manufacturing, sisal, tea, leather and
coffee exports to the Chinese mainstream economy so as to meet
the aspect of fair and balance of trade. An area for further study
would be on the Debt-Trap Diplomacy claims associated with
China aid policies to Sub-Saharan African countries.
Description
A Research Article in the International Journal of Research and Innovation in Social Science (IJRISS)
Keywords
Public Debt, External Debt, Domestic Debt, Foreign Aid, Concessional Loans, Grants, Gross Domestic Product.
Citation
International Journal of Research and Innovation in Social Science, Vol. V, Issue No.X, 2021, Impact of China’s Monetary Aid on Kenya’s Public Debt Stock Authors: Siocha Justin, Ichani Francis and Omagwa Job,