Treasury Cabinet Secretary John Mbadi has formally signed a Ksh40 billion loan deal with China, which had been agreed upon before President William Ruto and his delegation left the country earlier this week.
This latest agreement has pushed China’s total loan portfolio to Kenya beyond Ksh900 billion, pointing to Kenya’s dependency on China.
The deal, which was inked on Friday in Beijing, is set to fund the construction of 15 rural roads across Kenya, a move that Mbadi hailed as a game-changer for the country’s rural infrastructure. "These roads will boost economic activities, create jobs, and improve access to essential services in rural areas," the Treasury stated on its X account, shortly after the agreement was signed.
The signing ceremony, held at the China Development Bank, was attended by senior Kenyan officials, including Transport CS Davis Chirchir, Treasury PS Dr Chris Kiptoo, and engineer Joseph Mbugua. Tan Jiong, President of the China Development Bank, represented China during the negotiations, with both nations signalling their commitment to long-term cooperation.
In a statement earlier in the week, President William Ruto championed rural development, particularly in road infrastructure, which he argues is critical to uplifting the 70 per cent of Kenyans living in rural areas. "We are prioritising roads that directly affect the livelihoods of the majority of Kenyans," Ruto asserted in a statement.
The timing of the deal is notable as it comes on the heels of the rejection of the controversial Finance Bill 2024. The bill, aimed at raising Ksh346 billion in new revenue, faced a massive public backlash, leaving the government scrambling to fill the budget deficit. With the rejection still fresh, the administration has had to turn to external sources to plug the financial gaps.
While the International Monetary Fund (IMF) is set to release Ksh77 billion in financial support later this month, the Chinese loan is expected to deliver a more immediate impact on Kenya’s infrastructure ambitions.
Beyond the roads project, Kenya has also officially become a full member of the Asian Infrastructure Investment Bank (AIIB), marking the culmination of a six-year process. The AIIB, headquartered in Beijing, is a multilateral development institution with a capitalisation of $100 billion (Ksh12.8 trillion) and a membership of 109 countries.
Kenya's entry into the AIIB is seen as a strategic move, aligning the country with a key global player in development finance.
The AIIB’s concessional funding will offer Kenya opportunities to accelerate its infrastructure projects, combat climate change, and foster regional cooperation. Joining the AIIB positions Kenya to tap into funding that could further boost connectivity and technology-driven projects, areas critical to its Vision 2030 goals.
China’s commitment to Africa was further reinforced when President Xi Jinping announced a 10-point partnership plan for the continent. This ambitious action plan will provide Africa with $50 billion (Ksh6.5 trillion) in financial support over the next three years. The funds are earmarked for industrialisation, agricultural modernisation, trade, investment, and infrastructure development.
Additionally, Africa will gain greater access to China’s vast consumer market and benefit from 30 new infrastructure projects.
Kenyan officials have lauded the Chinese partnership as a vital lifeline at a time when the country faces severe economic challenges. However, critics argue that the growing debt burden could become unsustainable.
Despite the concerns, the government remains optimistic that the new roads and broader development initiatives funded by Chinese loans will spur economic growth, create jobs, and improve the quality of life for millions of Kenyans.
