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Additional Chinese loans "not sustainable" for Kenya - analyst

Leaders pose gather for a group photo session at the Belt and Road Forum in Beijing. 18/10/2023   -  
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Suo Takekuma/AP


Kenyan president William Ruto is seeking an additional $1 billion in loans from China despite Kenya's public debt having reached $70 billion.

President Ruto was was one of a number of global leaders in Beijing to attend the tenth anniversary meeting of China’s Belt and Road Initiative (BRI), the ambitious plan that aims to connect Africa, Asia and Europe through massive infrastructure and energy projects.

The BRI has seen the development of several infrastructure projects in Kenya, including the Standard Gauge Railway line, which runs from the port city of Mombasa to the Rift Valley via the capital, Nairobi.

Costing $4.7 billion dollars to build, it has faced numerous challenges, including delays and a low uptake of its freight service.

The SGR which started operations in 2017, was initially intended to go all the way to neighbouring Uganda to the west, as well as serving other landlocked countries in eastern and Central Africa.

However, Uganda pulled out and opted instead for partnership with a Turkish firm for the construction of its main line.

The line was mainly constructed using Chinese banks loans and last week.

Kenya currently owes China $6 billion, according to national data. 

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.

With many of its Chinese loans set to mature in the current fiscal year, Ruto has taken measures to reduce government spending, including asking all ministries to reduce their budgets by more than 10%.

Critics, however, say he has reneged on his promises by continuing to borrow heavily.

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