Kenyan President William Ruto will request a $1 billion loan from China to finish ongoing road construction projects during his upcoming trip to Beijing this month, according to a report by Reuters.
President Ruto’s new plan also includes asking for an extension of the maturity periods for existing loans, marking a change in his stance on Chinese debt. This shift comes after criticism from his coalition during his 2022 election campaign, where he questioned the borrowing spree by his predecessor, Uhuru Kenyatta, from China.
The current outstanding loans from China amount to over $8 billion, which were originally used by Kenyatta’s government to build infrastructure, such as roads. However, many of these projects have come to a halt due to contractors withdrawing their services due to unpaid bills.
Deputy President Godfrey Gachangua mentioned on a local radio station that the president intends to request additional time for repaying the new loan. He stated, “If we receive $1 billion, we can pay the contractors what they are owed, so they can return and complete the roads, even as we manage the debt.”
Official data reveals that the Kenyan government is currently allocating approximately half of its revenue to repay outstanding debts, which are approaching their due dates. This situation is putting significant strain on the country’s finances, and it has been exacerbated by foreign debt repayments, along with the sharp weakening of the Kenyan shilling.
In response to these economic challenges, President Ruto has instructed government agencies to reduce their expenditures by 10% in the current fiscal year as part of austerity measures to align with the available resources and cope with global economic crises.
