FLASHBACK: Kenyan lawyer says China flies in ‘cash bribes’ for African officials to accept loans

China flies in raw cash via cargo planes to bribe African government officials to accept loans, a senior Kenyan lawyer alleged two years ago.

Ahmednasir Abdullahi, a respected senior counsel and outspoken critic of the Kenyan government, said African countries prefer to borrow from China rather than Europe or America because of the kickbacks involved.

There is no suggestion that his allegation applies to loans taken by Nigeria from China as Abdullahi was speaking about the situation in his country.

However, Nigerians have been raising eyebrows on growing indebtedness to China amid claims the country has signed away its sovereignty.

A house of representatives panel shocked Nigerians when it recently said one of the loan deals between the federal government and China concedes parts of Nigeria’s territory to the Asian country, TheCable reported  recently.

The house committee on treaties and agreements had particularly raised concern over article 8(1) of the commercial loan agreement between Nigeria and Export-Import Bank of China, in which $400 million loan was obtained for Galaxy Backbone, the government’s information and communication technology (ICT) agency, in 2018.

After the alarm, many Nigerians called on the government to thread with caution regarding the loans. Others expressed concern over the nature of the commercial agreements, and asked the government to be more transparent.

Amid the growing concerns, Rotimi Amaechi, minister of transportation, said China will not approve Nigeria’s request for loans if the national assembly continues to probe the loan agreements the country has with lenders.

‘KICKBACKS BROUGHT IN PLANES’

In 2018, Abdullahi spoke of how China bribes African governments to take their loans.

Abdullahi, who is the chairman of the senior counsel committee, Law Society of Kenya, said the kickbacks are what makes various countries in Africa prefer the Chinese loans to that of other advances countries such as the US and UK.

Writing via his Twitter handle, he said: “Let us get one thing clear on the Chinese loans & why African politicians are MADLY in love.

“Due to legislation, American and EU companies CANNOT bribe or give 10% kickbacks when tenders are awarded. Chinese companies who are state owned give 10 to 30% bribe once tender is awarded.”

Let us get one thing clear on the Chinese loans & why African politicians are MADLY in love.Due to legislation, American and EU companies CANNOT bribe or give 10% kickbacks when tenders are awarded. Chinese companies who are state owned give 10 to 30% bribe once tender is awarded

— Ahmednasir Abdullahi SC (@ahmednasirlaw) September 12, 2018

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When he featured Kenya Citizen TV, the senior lawyer told Jeff Koinange, the host, that “there is nothing wrong with borrowing money from China” except the corrupt means through which such deals are done.

“The only problem we are borrowing money from China, and not from America or England or Germany, is because they can’t give kickbacks. It is impossible,” he said.

“It is impossible for an American company or a European Union company to give kickbacks. You will be arrested and the consequences are huge.

“In China, first, all these corporations are a state corporation, so actually it is the Chinese government giving kickbacks to Kenyan government officials. That is the only problem. If China can address these kickbacks, it is an excellent way of getting money.

“China can give 10, 20, 15 percent as kickbacks. And you know the money is not taken through the banking system. The money comes as cargo. Brought in via cargo planes. It is not a joke, you can ask anybody… that is why we have a property boom. There is a lot of corruption brought into this country.”

AT WHAT COST DO CHINESE LOANS COME?

Various experts have often warned of how a build-up of debt, caused by China’s lack of transparency in issuing loans, could pose a risk to not just the borrowing entities but to the world economy.

The CNBC once quoted reports which noted how some loans to countries have been shrouded in secrecy, with China often demanding public-sector assets as collateral.

It cited an example with Chinese loans to Venezuela which were “denominated in barrels of oil”.

The New York Times also reported how poor countries who took loans from China and were unable to refund lose their “strategic assets”.

“China’s loans differ from most other loans to developing countries by rich nations or by institutions like the World Bank,” it said.

“They tend to carry higher interest rates and shorter maturities, requiring refinancing every couple years. They frequently use national assets as collateral. Those features gave Chinese state-controlled banks the confidence to lend to poor countries.”