Sovereignty and the legality of collateralization of strategic national assets as security for loan procurement: China-Africa Relations
Date
2022
Authors
Chuma, Eric Mwendwa
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
In the early years of the new millennium, African countries long starved of development finance found a new partner in China, with many governments eager to procure readily available loan facilities to spur much needed impetus to economic plans. China looking to tap into new sources of raw material and new markets for Chinese goods have been more than generous with financing especially because the terms of the loans mean Chinese companies are contracted to do the work especially around infrastructure projects. However, the particulars of these loans are shrouded in secrecy, with confidentiality cited as an integral component of the terms and conditions. China is not a member of the Paris Club of creditors and thus operates outside the terms that govern that group of creditors as far as disclosure rules for debtor countries is concerned. There have been concerns about the use of national assets of borrower countries as collateral and what impact a default in repayment would have on the sovereignty of the affected countries. It is from this point of view that this study examines the three countries of Kenya Uganda and Zambia in their relationship with China probing whether their respective legal regimes offer effective protection to strategic national assets. The study in finding significant loopholes around the use of strategic assets as collateral in Kenya and Zambia, recommends various interventions to cure the ambiguity and provide for legal protection to them.
Description
A Thesis submitted in partial fulfillment of the requirements of the Degree of Master of Laws, at Strathmore University
Keywords
Strategic national assets, Loan procurement, China-Africa Relations