A report by global ratings firm, Moody's Investor Service, puts Kenya among the countries with the greatest risk to have their assets seized by Chinese creditors over soaring debts.
Moody's notes that Kenya risks losing control over strategically important infrastructure like ports and railways in negotiations with the Chinese.
In its report, the research firm notes that Beijing has not been uniform or transparent in responding to sub-Saharan Africa countries facing liquidity pressure.
Cases of asset seizure have been witnessed before including in Tajikistan, where China got land in exchange for some debt relief.
In Sri Lanka, the Chinese took control of the Hambantota Port to recover their debts.
As such, Moody's Investor highlights that there is less clarity on the predictability of credit implications hence asset seizure cannot be ruled out.
"In general, concentrated exposure to a single creditor, with little transparency about decisions to restructure the terms of the debt, increases rollover risks, weakening the fiscal profile," Moody’s adds.
Other countries that risk asset seizure are Angola, Zambia and Republic of the Congo, all which are rich in natural resources.
The research firm also notes that the countries are likely to be offered liquidity relief at higher resource concessions hence reducing the value of future export earnings.
"Even if debt restructuring alleviates immediate liquidity pressure, the loss of natural resources revenue or other assets is credit negative," the statement by Moody's Investor indicates.
According to the National Treasury, by the end of September, Kenya's Chinese debt stood at Kshs554.88 billion ($5.4 billion) or 73.4 per cent of total bilateral debt of Kshs756.28 billion ($7.3 billion), most of which is linked to the construction of the Standard Gauge Railway (SGR).
