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Over the past 10 years, Kenya’s total debt has quadrupled, in part owing to taking loans on big infrastructure projects, reaching USD 87.6bn in March, equivalent to 70% of GDP.
Kenya is in talks with China to convert a dollar-denominated loan to fund a railway project into Renminbi (RMB). Kenya wants to limit its debt servicing spending to USD 1 billion annually, as part of its overall strategy.
Kenya’s Treasury Secretary John Mdabi, said discussions were underway to conclude the deal soon, without elaborating on the modalities. He said that if Kenya moved from the US dollar-denominated to the RMB, the interest burden would be reduced by almost half. Kenya has an external debt of USD 40.5 billion at the end of March. It owed USD 14.4bn to the World Bank, USD 7.52bn to Eurobond investors, and nearly USD 5.04bn to China.
Mdabi said the talks with China centred on loans Kenya took to build a US$5bn high-speed standard-gauge railway (SGR), connecting the port city of Mombasa to Nairobi and onwards to Naivasha, a town about 90km northwest of the capital. Launched in 2017, the railway was built by the China Road and Bridge Corporation and financed largely through commercial and concessional loans from China’s Exim Bank.
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Over the past 10 years, Kenya’s total debt has quadrupled, in part owing to taking loans on big infrastructure projects, reaching USD 87.6bn in March, equivalent to 70% of the GDP.
