Telkom To Continue Managing NOFBI For The Next 3 Years But There is A Problem with Chinese Loans

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So Telkom Kenya will continue to manage NOFBI for the next three years. The government, through the Ministry of Information, Communication and Technology has renewed its ongoing agreement with Telkom Kenya to manage the National Optic Fibre Backbone Infrastructure (NOFBI).

NOFBI, is the initiative that meant to delivers last mile connections to different counties in Kenya. The Chinese government has extended a concessional loan of KES 6.12bn for the project, whose tender has been awarded to Huawei, the Chinese state-owned networking and telecommunications and services provider. The pilot project initially covers 11 counties.

Who said China has no conditions for the loans it gives to African countries? China funded Thika Highway construction and the contract had to be awarded to a state owned Chinese company. As already mentioned above, the tender for NOFBI has been awarded to another state owned Chinese company Huawei. This is a case of someone giving you the money on one hand and forcing you to pass it back to him/her on the other hand.

I wonder how beneficial this kind of arrangement is to the country. I feel with such arrangement it is hard to grow the local companies as the contracts have to be given back to the Chinese state owned companies. Since we will still have to pay back the loans given, we should definitely have the freedom to award the contracts to whoever Kenyans feel is capable and with National interest in Mind. It reminds me of the story which appeared on the Business Daily today titled Taxman digs Sh100bn hole in bid to attract foreign investors

Kenya is losing over Sh100 billion in tax revenue through wide-ranging exemptions mainly to multinationals.

Experts say the loss, which excludes revenue forfeited in capital gains, calls for urgent changes to the existing trade and investment incentives.

According to a new report by the non-governmental organisations ActionAid and Tax Justice Network, the numerous tax incentives given to the foreign investors do not translate to substantial returns in foreign direct investments (FDI).

What is your opinion on the topic?
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