6 - Kenya: Uneven Financial Statecraft

Summary

This chapter examines Kenya's use of debt-based financial statecraft, revealing an uneven track record. It first describes how the Kenyan government diversified its portfolio of external finance with both international bonds and Chinese loans. Drawing on interviews with government and donor officials, the chapter then shows Kenya's mixed success in extracting bargaining leverage from its new sources of finance. While the Kenyan government achieved increased flexibility from donors on governance issues, it encountered greater resistance on financial management practices. The chapter highlights that donors' strategic interests in their relationship with Kenya encouraged them to be more flexible when Kenya diversified its portfolio of external finance, but that their concerns about accountability and use of funds led them to be more stringent on issues of financial management.