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.

This chapter considers Ghana's use of debt-based financial statecraft, describing the country's early embrace Chinese loans and substantial borrowing in international bond markets. Despite diversifying its sources of external finance, the government had limited success leveraging its reduced reliance on traditional donor funds in aid negotiations. Based on interviews with government and donor officials, the chapter demonstrates that, while the Ghanaian government initially secured some negotiation wins, it ultimately struggled to achieve its preferred outcomes with donors on either economic policy or financial management. The chapter attributes these difficulties to donors' diminished perception of Ghana's significance and a lack of donor trust, underscoring the complexities of using alternative finance as leverage in aid negotiations.

This chapter focuses on the Ethiopian government's successful use of debt-based financial statecraft. It examines Ethiopia's shift from heavy reliance on traditional donor aid to borrowing from Chinese lenders and issuing a debut international bond. Using interviews with government and donor officials, it highlights how this diversification of external finance allowed the Ethiopian government to obtain more favorable terms in aid agreements, including lenience from donors on governance issues, flexibility on economic monitoring, and donor support for the government's state-led approach to development. When Ethiopia's financing options later narrowed, the government's bargaining leverage with donors declined, further corroborating the role of alternative finance in aid negotiations. The chapter underscores the importance of donors' perceptions of Ethiopia's strategic value and donors' trust in the government for their willingness to accommodate the Ethiopian government's preferences.