Kenya has officially become a full member of the Asian Infrastructure Investment Bank (AIIB) as of September 3, 2024, concluding a membership process that has spanned nearly six years.
This development marks Kenya’s entry into a major multilateral development institution with a robust capitalisation of $100 billion about Ksh12.8 trillion and 109 member countries.
The AIIB, headquartered in Beijing, China, is a strategic player in global development finance, offering concessional funding aimed at boosting infrastructure, combating climate change, enhancing connectivity, fostering regional cooperation, and supporting technology-driven projects.
Why it matters: This move comes as part of the Kenya Kwanza administration’s broader strategy to leverage green financing and broaden the country’s financial base for development. The timing is equally opportune for Ruto, as he seeks to raise over Ksh1 trillion to plug budget shortfalls that came after Kenyans rejected the Finance Bill 2024.
Dig dipper: Kenya's membership in the AIIB was finalised following a key Cabinet approval in January 2024, pointing the country's commitment to diversifying its funding sources beyond traditional Western-dominated institutions like the International Monetary Fund (IMF) and the World Bank. This decision aligns with the administration's agenda of strengthening regional cooperation and advancing connectivity through sustainable, green economic practices.
President Jin Liqun and the Board of Directors welcomed Kenya’s accession during a recent meeting at the AIIB headquarters. The membership is expected to provide Kenya with significant financial resources for projects that align with the bank's focus areas, including infrastructure development and climate action.
AIIB’s funding will play a crucial role in supporting Kenya’s infrastructure needs and green initiatives, complementing similar financing previously received from the IMF.
The AIIB was established in 2016 as part of China’s ambitious One Belt, One Road (OBOR) initiative, aimed at creating a vast network of trade routes linking Asia, Europe, and Africa.
Kenya, already an integral part of this initiative, will now have enhanced opportunities to benefit from the bank’s financial resources, further integrating its development goals with China’s strategic economic framework.
China’s AIIB challenges the traditional dominance of Western financial institutions by offering an alternative model of development financing. Analysts view this as a strategic move by Kenya to diversify its financial partners and reduce dependency on Western institutions.
The AIIB’s focus on infrastructure and regional connectivity aligns well with Kenya’s developmental priorities and its strategic position within the OBOR initiative.
