Ruto to ask China for $1 billion loan

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Ruto to ask China for $1 billion loan
Ruto to ask China for $1 billion loan

Africa-Press – Kenya. Kenyan President William Ruto will ask China for a $1 billion loan to complete stalled road projects when he travels to Beijing later this month, his deputy Rigathi Gachahua said Friday.

Speaking on local radio Inooro FM, Gachahua said that Ruto will also ask for a longer repayment period for the money that is already owed.

Kenya currently owes more than $8 billion in Chinese loans.

Ruto’s plan is a marked shift in his stance, after his coalition previously criticised his predecessor Uhuru Kenyatta’s borrowing spree from China.

Unpaid bills

Kenyatta used the Chinese loans to fund infrastructure projects, such as the Nairobi expressway, but many of these projects have since stalled as contractors abandon them due to unpaid bills.

“If we get $1 billion we can be able to give these people [contractors] the money they are owed so they can return so even as we pay the debt, the roads are completed,” Gachahua said.

The deputy said Ruto will ask Chinese officials if Kenya can be given more time to repay the debts.

Belt and Road Initiative

Kenya was one of many countries on the continent that were a focus of China’s Belt and Road Initiative, an ambitious project launched in 2013 by President Xi Jinping to extend Chinese geopolitical and economic influence through a global infrastructure development push.

But the surge in Chinese loans to countries like Kenya, before a slowdown in Chinese lending from 2019, has angered critics, pushed up debt loads and the subsequent repayment burden.

The Kenyan government is spending roughly half of its revenue to repay debts that are falling due, official data shows, straining its finances. The situation has been compounded by foreign debt repayments, amid a steep weakening of the Kenyan currency.

The cabinet ordered all ministries to cut 10% of their budget on Tuesday, while the president’s office imposed some restrictions on foreign travel by government officials to rein in expenditure.

“It is true that many people have been travelling abroad, spending a lot of money, and that is why the president ordered that even ministers and governors can only travel with two people,” Gachagua said.

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