Since assuming the Presidency on September 13, 2022, William Ruto has shied away from taking a loan from China.
This is a sharp shift from his predecessors Mwai Kibaki and Uhuru Kenyatta who preferred the East for loans.
Instead of President Ruto seeking loans from the East like former Heads of State, he has sought loans from AfriExim Bank, International Monetary Fund (IMF) and other Western-backed financial institutions.
Kenyans.co.ke spoke to economists Prof Fred Ogola and Vincent Kimosop on why China was conspicuously missing in Ruto’s borrowing basket.
Ogola remarked that Ruto was avoiding China due to geopolitics and the need not to betray key allies.
“Ruto was largely backed by the West and so, he must repay that by partnering with them,” he alleged.
The Professor noted that the President, however, will have the freedom to borrow from China should he successfully defend his seat in 2027.
“In his second term, he will be freer to borrow from China and other financial institutions but currently, due to geopolitics, he must align with the West.
“The West is bullish in terms of their support and Ruto cannot risk sanctions should he negate from earlier understanding,” he stated alleging that Ruto was repaying the West for the support accorded during his quest for the presidency.
Kimosop, on the other hand, remarked that Ruto turning to the West did not necessarily mean he was abandoning the East.
He explained that Ruto was doing what was best for the country economically and that would periodically change depending on factors at play.
“The President looks at the best alternative depending on the current situation.
“We have a lot of loans taken by the former administration maturing this year (2023) and it is only prudent for the President to seek concessional loans which will take a longer time to mature,” Kimosop explained.
He explained that it was the only way that the country could manage the huge foreign debt which has immensely affected the country's revenue collection.
While appearing before Public Debt and Privatization Committee, Treasury Principal Secretary, Chris Kiptoo, revealed that Kenya had a debt totaling Ksh9.6 trillion.
To lower that amount, Kiptoo announced that in the 2023/2024 financial year, Ksh607.1 billion would be used to settle part of the debt.
The PS added that once Kenya was in a good place financially, the government would continue seeking loans from China.
“China still remains one of our largest trading partners and the President cannot isolate. It is just that in terms of financial aid, the West now offers the best alternative,” he explained.
