Anticipating and mitigating the legal risks resulting from default on external debt from China
Date
2022
Authors
Odhiambo, Moses Antony
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
In the absence of legal provisions anticipating and protecting against the legal risks of default on external debt from China (a non-Paris Club creditor), Kenya remains exposed to insolvency or debt restructuring procedures that are unclear and not standardized. Even though the government is on a strategic move to cover the infrastructure gap in the country, the people of Kenya shall remain constantly confronted with longstanding legal and economic consequences owing to the absence of a regulatory framework that would inform sustainable debt strategies. The following study therefore investigates the legal risks incidental to such debt that Kenya has been procuring through bilateral loans with China despite alternative low-cost concessional finance for the development of critical infrastructure in the country. As such, the study seeks to delineate the parameters and metrics that would inform a legal framework that anticipates and guards against the detrimental effects of such risks, drawing from the principles of traditional lending and debt restructuring under the Paris Club. This is based on analysing the legal risks and weighing them against conventional principles of sovereign debt to examine the magnitude of the risks and possible mitigation through legislative and policy interventions.
Description
A Thesis submitted in partial fulfillment of the requirements of the Degree of Master of Laws, at Strathmore University
Keywords
Non-Paris Club creditors, External debt, Default, Debt restructuring, China debt