,
President William Ruto is banking on China to keep Kenya's struggling projects afloat.
As the government grapples with an urgent need to secure Ksh1.2 trillion to remain operational this year, China has stepped in, offering a lifeline in the form of a Ksh40 billion loan. With the addition of the new Ksh40 billion facility, China's loan portfolio to Kenya will surpass Ksh900 billion, cementing its position as a key player in the country's financial landscape.
Why it matters: This new financial boost comes just days before Ruto's scheduled visit to Beijing, signalling a renewed reliance on the Asian giant after recent engagements with the International Monetary Fund (IMF). Ruto's administration faces a daunting financial landscape after Kenyans soundly rejected the Finance Bill 2024, which aimed to raise Ksh346 billion in new revenue.
In a bid to bridge the yawning budget gap, the government has turned to international lenders. The IMF is expected to release Ksh77 billion this month, but it is the Chinese loan that is set to have a more immediate impact on the ground.
Dig dipper: The Ksh40 billion from China will be directed towards resuscitating stalled infrastructure projects across 15 counties. These projects, which have languished due to financial constraints, are vital for regional development but have been a source of growing frustration among local communities.
The National Assembly Budget Committee Chair, Ndindi Nyoro, confirmed that contractors would be back on site by September, thanks to the Chinese intervention.
Nyoro pointed out that the government is under immense pressure from these stalled projects, which have accumulated significant pending bills.
"For the last 10 years, we bit more than we could chew, and that is why we now have a lot of pending projects, mostly on roads," Nyoro remarked, underscoring the severity of the situation.
The new funding is set to unlock crucial road projects in counties such as Elgeyo Marakwet, Baringo, Embu, and Kiambu, among others.
These roads, including the Tot-Sigor Road and the Kanyuambora Road, are critical arteries for local economies and have been long overdue for completion.
The stalled Rioma and Marani roads in Kisii County, along with the Belt of Gichugu project in Kirinyaga, are also on the list of roads to benefit from the fresh funds.
In Makueni County, the long-neglected Tawa, Nguluni, and Itagine roads will finally see contractors return to work. Similarly, the Njoro, Piston, Elburgon Road in Nakuru, which has been a source of frustration for residents, is set to receive a portion of the new funds.
Other counties, including Nyeri, Taita Taveta, and Nyamira, are also earmarked for quick government intervention, with Nyoro emphasising that all contractors are expected to be on site by next month.
China-Africa Summit: This new deal with China marks a significant shift for Ruto, who had previously been critical of the massive Chinese-built infrastructure projects undertaken during Uhuru Kenyatta's tenure.
His body language at the upcoming China-Africa Cooperation Summit in Beijing will be closely watched, as commentators speculate on how his administration will navigate the complex relationship with Beijing amid Kenya's growing debt burden.
China's influence in Africa has grown substantially over the past decade, with the country emerging as a major lender to emerging economies. Kenya's debt to China stands at a staggering $6.7 billion (approximately Ksh864.3 billion) in 2022, a figure that rivals loans from traditional international financial institutions like the IMF and the World Bank.
