Kenya eyes loans, more deals from China

Kenya will today know the fate of its plans to revive the stalled Standard Gauge Railway to Malaba through Kisumu when President William Ruto holds discussions with Chinese President Xi Jinping.

Kenya has been seeking Chinese funding to extend the SGR, which terminates at Mai Mahiu and is seen by many businesses as an inconvenient stop and many prefer using road transport. This is despite the efficiency and cost effectiveness that would come with the railway. Extension of the railway is seen as critical in easing movement of cargo to Western Kenya but also to countries in the region.

The 475km railway extension has been projected to cost Sh650 billion. While it is largely expected that China will finance the extension through debt, Kenya is also seeking alternatives to finance mega infrastructure projects, with the country finding limited room to take up more loans. Kenya’s public debt is already seen on the verge of unsustainability.

Kenya also expects discussions to focus on securing funding for road network improvements and the expansion of key port and airport facilities, mostly through alternative funding methods including Public Private Partnerships.

Among the road projects likely to come up during Ruto’s visit to China include Rironi Mau Summit road. The road, whose duelling and tolling had earlier on been awarded to a consortium of French firms, came up during Forum on China-Africa Cooperation (FOCAC) summit last year when Kenya said it would now be undertaken by Chinese firms.

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While Ruto is looking for a mix of loans and private capital to complete many unfinished infrastructure projects, he has been accumulating loans and played a role in pushing Kenya debt to current levels.

His regime has been on a borrowing spree, something it had harshly criticised the Jubilee administration for, pushing Kenya’s public debt to Sh10.93 trillion as of December 2024 from Sh8.58 trillion when Ruto took over in 2022.