Kenya seeks China's approval to convert dollar loan to yuan

Nairobi specifically wants to reprofile the $5bn loan that Beijing underwrote for the construction of the east African country's modern railway, the finance minister told Reuters Wednesday.

If approved, the move would reduce pressure on Kenya's forex reserves.

The country spends nearly $1bn a year in debt service to China.

Since 2022, Kenya's debt servicing costs have skyrocketed owing to higher interest rates and a strong dollar.

It is not known if Kenya has sought to convert any other dollar denominated loans.

There was no word from Beijing on the news.

Of Kenya’s $40.5 billion in external debt at the end of March, it owed $14.4 billion to the World Bank, $7.52 billion to eurobond investors and almost $5.04 billion to China, according to Treasury data.

The International Monetary Fund lists Nairobi as being at a high risk of debt distress.

The Standard Gauge Railway (SGR), part of a regional connectivity project runs from the port of Mombasa to Naivasha in central Kenya.