Kenya plans 368 billion shillan loan for China trip

Kenya is preparing to use the second BRI forum in Beijing to obtain a loan for the completion of the third phase of the normal-gauge railway, said Kenya's ambbadador to China, Sarah serem.

Speaking Tuesday on the sidelines of the international symposium on Sino-African cooperation and interpersonal exchanges, Serem downplayed fears that China's heightened debt would hurt Kenya's economy.

"Leaving RMS mid-stream will hurt the economy and that's why, as a government, we are seeking another loan at the next BRI forum at the end of the month. Kenya knows what is good for its people. We must therefore invest in areas that will strengthen the country's development, "said Serem.

Ms Serem said that a Kenyan delegation had already met Exim Bank and representatives of the Chinese Ministry of Commerce and Foreign Aid to conclude negotiations on the second loan of 368 billion shillings.

In March, Principal Secretary of Transportation Esther Koimett and Kenya Railways Acting Director General Philip Mahinga led a delegation to Beijing to finalize talks on securing the loan to finance the Naivasha stretch in Kisumu SGR.

It is estimated that the stretch to Kisumu will cost 350 billion shillings upon completion.

The Mombasa-Nairobi line was built at a cost of 327 billion shillings, while the one from Nairobi to Naivasha, whose completion is about two months, is expected to swallow 150 billion shillings.

If the loan is granted, the SGR project will have cost Kenyan taxpayers 845 billion shillings.

Serem denied allegations that the Chinese were using loans to trick African countries into unpayable debts with valuable state badets used as collateral.

"On the question of the debt trap, it all depends on how you model your facilities. What will the road or railroad do? It's as if you are going to a bank like Kenya Commercial Bank to give you a loan. If you use it wisely, it will yield a lot of fruit and that is the concept of BRI. As a government, we invest in areas that stimulate our economy, "said Ms. Serem.

She said Kenya would use the BRI forum to show the impact of the completion of the Mombasa-Nairobi railway on the economy.

"No country can develop without building an infrastructure and openness component for more investment, and the BIS has prioritized these areas," said Serem.

Last month, President Uhuru Kenyatta and his Ugandan counterpart, Yoweri Museveni, reaffirmed the commitment of both countries to stick to the initial plan of construction of the railway until Kampala, a sign that Kenya would request another loan to build Kisumu RMS. at the Malaba border post.

Kenya and Uganda briefly deferred on cross-border RG financing, with Chinese bank Exim Bank insisting that Kampala must secure Nairobi's commitment as a precondition for securing a loan for the line. to Kampala.

Kenya fears increasing public debt due to Nairobi's focus on Kisumu port as part of plan to get Uganda and Rwanda to move goods through Lake Victoria, reducing the prospects for a connection Seamless SGR between the ports of Mombasa and Kampala.

During Mr. Museveni's visit to Mombasa, Mr. Kenyatta stated that he "was now interested in the joint development of the SGR line in Kampala", which his Ugandan counterpart described as "revolutionary".

The details of the repayment of the SGR loan remained a closely guarded government secret.

The president's promise to make public the contract with the Chinese has not yet been honored.

This move to get the government to seek funding from China is boosting the debate on Kenya's rising debt, as taxpayers are increasingly under pressure to fund Jubilee's flagship project.