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, according to his deputy.
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 blasted his predecessor’s borrowing binge from China during the election campaign last year.
The former government of President Uhuru Kenyatta used the Chinese loans, which total more than $8 billion, to build roads and other infrastructure, but many of these projects have already stagnated as a result of contractors leaving with unpaid invoices.
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, according to his deputy.
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 blasted his predecessor’s borrowing binge from China during the election campaign last year.
The former government of President Uhuru Kenyatta used the Chinese loans, which totaled more than $8 billion, to build roads and other infrastructure, but many of these projects have already stagnated as a result of contractors leaving with unpaid invoices.
“Can we talk to see if you can add us 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.
“If we get $1 billion we can be able to give these people (contractors) the money they are owed so they can return so even as we pay the debt, the roads are completed,” he said.
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 regions of focus.
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 pressure of repayment.
According to official figures, the Kenyan government is straining its finances by using approximately half of its earnings to pay off debts that are coming due. Repayments of foreign debt and a sharp depreciation of the kwacha have made the situation worse.
Tuesday, in an effort to control spending, the president’s office placed some limitations on government officials’ travel abroad. The cabinet also ordered all departments to make a 10% budget cut.
“It is true that many people have been travelling abroad, spending a lot of money, and that is why the president ordered that even ministers and governors can only travel with two people,” Gachagua said.
