Economy
Chinese hackers attacked Kenya in part to assess debt – Reuters
Wednesday May 24 2023
The National Treasury building in Nairobi in this picture taken on March 15, 2023. PHOTO | DENNIS ONSONGO | NMG
Chinese hackers targeted Kenyan ministries and other State institutions including the State House from 2019 to last year in a bid to assess billions of dollars owed to Beijing, a Reuters investigation shows.
Reuters reported on Wednesday that years-long cyberattacks started in 2019 when the Chinese started closing credit taps to Kenya as debt strains started showing.
A vast trove of documents was stolen by the attackers from the Ministry of Foreign Affairs and the National Treasury allegedly to help the Southeast Asian country assess the debt situation.
“A lot of documents from the Ministry of Foreign Affairs were stolen and from the finance department as well. The attacks appeared focused on the debt situation,” Reuters quoted a Kenyan cybersecurity expert.
The security breach started with a spearphishing attack after a State employee downloaded an infected document unknowingly in 2019 and went on up to last year, Reuters said quoting three cybersecurity experts familiar with the attacks.
The attacks targeted the Presidency, eight key ministries including foreign and finance ministries and State departments which were critical in the implementation of the Belt and Road Initiative- China’s infrastructure pet project.
The breach also affected the National Intelligence Service (NIS) after the attackers secretly accessed email servers used by the spy agency. Reuters said the NIS breach was possibly aimed at gleaning information on how Kenya planned to manage its debt payments.
China’s foreign ministry has termed the allegations as “baseless” while Kenyan officials said the reports are not unique as the country has experienced similar attacks from European and American hackers.
Kenya owed China $6.31 billion last March, the smallest volume since $6.01 billion in March 2019 after peaking in June 2021 at $7.06 billion.
The drop is in line with Beijing’s cautious approach to lending to Kenya and Africa in the post-Covid era amid warnings that key economies in the continent were facing a multitude of debt tripwires in the wake of a protracted global economic turmoil and could default on payments.
That slow-down investment in Africa’s infrastructural projects came after a few countries like Angola and Ethiopia struggled to honour obligations, while Zambia defaulted.
This comes at a time President William Ruto has made it clear that his administration will cut down on expensive foreign borrowing, including rich countries like China.
The bulk of China’s loans to Kenya were channelled through Exim Bank, which in May 2014 bagged the mega deal to fund as much as 90 percent of the $3.6 billion (about Sh494 billion under the prevailing exchange rate), 485-kilometre Mombasa-Nairobi SGR line.
The SGR deal saw Beijing overtake Tokyo as Kenya’s largest bilateral lender.
The terms of Beijing’s loan deals with developing countries are usually secretive and require borrowing nations like Kenya to prioritise repayment to Chinese state-owned banks ahead of other creditors, according to a dataset compiled by AidData — a US research lab at the College of William & Mary.
Kenya’s bilateral debt repayments towards China-funded infrastructure projects have grown by nearly half to a new record of Sh107.42 billion this financial year on the back of increased clearance of principal sums after the grace period lapsed.
The expenditure data published by Treasury Cabinet Secretary Njuguna Ndung’u shows the amount repaid to Chinese lenders was 46.19 percent more than Sh73.48 billion in the previous financial year.
This comes after the repayment moratorium ended four years ago.
