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Additional Chinese loans “not sustainable” for Kenya – analyst

Despite Kenya’s public debt reaching $70 billion, President William Ruto joins other global leaders in Beijing for the tenth-anniversary meeting of China’s Belt and Road Initiative (BRI), which strives to link Africa, Asia, and Europe through extensive infrastructure and energy projects.

President Ruto seeks an additional $1 billion in loans from China.

Several infrastructure projects in Kenya have been developed as a result of the Belt and Road Initiative (BRI), one of which is the Standard Gauge Railway line that connects Nairobi, the country’s capital, to the Rift Valley via the port city of Mombasa.

Despite being built at a cost of $4.7 billion, it has had many difficulties, including as delays and limited freight service uptake.
The SGR, which began operations in 2017, was initially designed to serve other landlocked nations in eastern and central Africa as well as the neighboring country of Uganda to the west.

But Uganda withdrew, choosing instead to collaborate with a Turkish company to build its main line.
The majority of the line was built last week with loans from Chinese banks.

Based on government data, Kenya owes China $6 billion at the moment.
Karuti Kanyinga, a research professor at the Institute for Development Studies at the University of Nairobi, said Kenya’s “largest creditor today is China.”

“We are paying through the nose and most of our earnings are actually going to paying Chinese loans and that is not going to be sustainable,” he said.

Ruto has taken steps to cut back on government spending, including requesting that all ministries cut their budgets by more than 10%, as several of its Chinese loans are due to mature in the current fiscal year.

Critics counter that by continuing to take on large debt, he has broken his pledges.

Source: Africanews

Maravi Post Reporter
Maravi Post Reporterhttps://www.maravipost.com/
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