Summary: Kenya’s President William Ruto attended China’s Belt and Road Initiative forum, where he sought $1 billion in loans from China. This is despite Kenya’s rising public debt, which has reached $70 billion. President Ruto’s request was made to fund infrastructure projects in the country.
Kenya’s President William Ruto attended the tenth anniversary meeting of China’s Belt and Road Initiative in Beijing, where he sought $1 billion in loans from China despite the country’s escalating public debt. According to National Treasury figures, Kenya’s public debt has reached $70 billion for 2022/2023.
The loans were requested to fund massive infrastructure and energy projects in Kenya as part of the Belt and Road Initiative, which aims to connect Africa, Asia, and Europe. President Ruto delivered a keynote address on the topic of ‘Digital Economy as a New Source of Growth’ and participated in a Kenya-China investors roundtable to promote Kenya as an investment hub for Chinese companies.
One of the notable projects in Kenya under the initiative is the Standard Gauge Railway line, connecting the port city of Mombasa to the Rift Valley via Nairobi. Although the project faced challenges, including delays and low uptake, it was constructed using Chinese bank loans. The Kenyan government is now looking to expand the railway to make it financially sustainable.
Kenya’s ballooning public debt, with $6 billion owed to Chinese creditors, has raised concerns. Some of the loans will mature in the coming fiscal year, putting pressure on the government. President Ruto’s administration has been diligent in paying its Chinese loans and will leverage its track record as it seeks concessions. However, it remains uncertain whether restructuring or extensions of interest payments will be granted.
Despite efforts to reduce government spending, such as restrictions on foreign trips and budget cuts, critics argue that President Ruto has continued to borrow heavily. Last week, legislators called for transparency on all loans accumulated during President Ruto’s tenure. Details of these loans are yet to be submitted to the national assembly.
Tags: Kenya, China, loans, public debt, Belt and Road Initiative, infrastructure projects