Diversification Of External Sources Of Financing Development In Africa: Impact Of Kenya’S Relation With India And China
Abstract
African countries face varied complex issues that the western countries have failed to address since
independence. However, after the end of the cold war, there was a high transformation in the aid
architecture, with the emerging donors coming on board with favorable aid conditionality’s that
are more attractive to African countries. The diversified external sources of finance have proven
to be more efficient in solving African issues directly, unlike traditional donors. To this end, this
study evaluated the diversified external sources of financing development in Africa, assessed
strategies that are employed by African countries in seeking external finance, and critically
analyzed the impact of external sources of financing development from China and India on
Kenya’s growth.
Based on the nature of the study, it used a mixed methodology design in both data collection and
analysis. Primary data was derived from interactive interviews and administration of
questionnaires from officials in the Ministry of foreign affairs and international trade, China, and
India officials in their Embassy in Kenya. Secondary data were sourced from a collection and
review of published and unpublished material, journals, academic papers, and periodicals. These
were taken through intensive and critical analysis. Qualitative data was analyzed using content
analysis while quantitative data was analyzed by the use of SPSS software. Quantitative data were
presented in tables and pie charts with interpretations done using percentages. Qualitative data was
thematically presented based on the study objectives.
The study relied on the dependency theory and borrowed some tenets from the realism theory in
explaining Africa countries' reliance on external sources of finance. The study established that
Africa diversification of external sources of finance is a result of its changing needs and failure of
traditional donors in addressing its complex issues. The study also revealed that the emerging
donors in aid architectures provided loans with favorable conditionality’s, respected recipient
countries sovereign, and they were channeled where they are needed most. In addition, Findings
indicated that Kenya benefited extensively from India in health sectors, technical areas, and
infrastructure development loans. The study also revealed that the majority of China's financing
means was done through infrastructural development. Findings showed that the Africa-Asia
relationship has helped revamp the continents' economic growth. African governments have
created promising avenues for Diasporas to remit money back home. Findings showed that one of
the challenges overcame by external sources from India and China was health problems and
eliminating transport congestion. Chinese companies' road expansion has solved most of the
transportation challenges, such as traffic jams. Finally, findings established that infrastructural
development was the main economic advancement from China. China was mainly involved in the
construction of roads, railways, dams, and energy projects. The study recommends that African
countries should come up with suitable projects that need funding. Donors should make it
mandatory for public-private partnerships before they give out any forms of assistance. Public
participation should be emphasized by the donors for the value of the money to be realized.
Publisher
University of Nairobi
Subject
Financing Development In AfricaRights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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