President William Ruto is seeking to borrow $1 billion more from China, despite critisizing former President Uhuru Kenyatta for heavy borowing.
In Summary:
• President Ruto is eyeing an additional $1 Billion loan from China.
• China regards Kenya as a strategic & geographical asset.
• The Belt Road Initiative 10th anniversary kicks off in Beijing.
The rising public debt that has now reached $70 billion.
Earlier this month, law makers reportedly tabled a motion asking the government to reveal details of the loans it had accumulated since President Ruto’s tenure began.
To date, the national assembly is yet to receive submitted figures for assessment.
Loans for Infrastructure Development.
President Ruto has attended the 10th anniversary meeting of China’s “Belt and Road” Initiative in Beijing. This plan aims to connect Africa, Asia and Europe through massive infrastructure and energy projects.
One of the main reasons Kenya is drawn to Chinese loans is the promise of infrastructure and development.
China offered to finance and construct major infrastructure projects, such as modern railways and highways. This would boost economic development Kenya. However, is it worth the record breaking debt?
“The President will be asking Chinese officials to repay the loans slowly, while also borrowing a little money to finish stalled road projects,” reportedly said DP Gachagua in an interview with a local radio station.
The SGR project is one of the BRI projects in Kenya which runs from the port city of Mombasa to the Rift Valley via the capital, Nairobi. It reportedly cost $4.7 billion dollars to build but is yet to be completed and has registered low use of its services.
Economic Hub.
Kenya’s geographical location and its role in East Africa makes it a strategic asset to China. Nairobi, with its status as an African economic hub, makes Kenya an attractive destination for Chinese investments.
“The president will participate in a Kenya-China investors roundtable to emphasize Kenya’s standing as an investment hub for Chinese companies,” read a statement from Kenya’s State House Spokesman Hussein Mohammed.
Engaging with China also allows Kenya to diversify its international relations and economic partnerships. Kenya will not only rely on the usual Western donors and can better weigh it’s options.
Public Debt Concerns.
The government’s opposition has openly critisized the President’s decision to plunge the country further into debt.
With our struggling economy, rampant borrowing seems to be doing more damage than good. Some critics argue that China is engaging in “debt-trap diplomacy”.
This is when countries are lured into borrowing large sums of money they can’t repay, giving China leverage over them in the future. What do you think is China’s end game here? Rudi nyumbani.
