Kenya to seek a $1 billion loan from China with a longer repayment period. According to his deputy, when he visits Beijing later this month, Kenya’s President William Ruto is to request a $1 billion loan from China to finish up stalled road development projects.
Ruto’s proposal, which also asks for the maturity dates of current loans to be extended, represents a change in his position on Chinese debt after his coalition criticized his predecessor’s borrowing binge from China during last year’s election campaign.
The former government of President Uhuru Kenyatta used the Chinese loans, which total more than $8 billion, to build roads and other infrastructure. Still, many of these projects have stagnated due to contractors leaving with unpaid invoices.
“Can we talk to see if you can add time so we can pay slowly and add us a little money so we can finish road construction?” Ruto would ask Chinese officials. Rigathi Gachagua, the vice president, made the statement on the Inooro FM radio station.
He continued that if we raise $1 billion, “we’ll be able to pay these people (contractors) what they’re owed so they can come back and the roads will be finished even as we pay the debt.”
The ambitious Belt and Road Initiative, announced in 2013 to revive the Silk Road and expand China’s geopolitical and economic power through a drive for global infrastructure development, has Africa as one of its main focus regions.
Before Chinese financing began to slow down in 2019, though, there was a boom in loans to nations like Kenya, which infuriated opponents and increased debt loads and the accompanying repayment pressure.
According to official figures, the Kenyan government is straining its finances by using approximately half of its earnings to pay off coming-due debts. Repayments of foreign debt and a sharp kwacha depreciation have worsened the situation.
The president’s office limited government officials’ travel abroad on Tuesday to control spending. The cabinet also ordered all departments to make a 10% budget cut.
Gachagua stated that the president had ordered ministers and governors to travel only with two persons since “many people have been traveling abroad, spending a lot of money.”
