Kenyan President Seeks New $1 Billion Loan from China to Complete Highway Projects

INTERNATIONAL EDITORIAL.- The president of Kenya, William Rutowill travel to China to ask the Beijing a new loan of 1,000 million Dollars (about 950 million euros) destined to finish stalled highway projects, announced today the vice president of the African country, Rigathi Gachagua.

Likewise, the Kenyan head of state will seek an extension of the payment period for existing loans with the Asian giant, which amounted to around $6.3 billion last March.

“In these negotiations, the president will ask the Chinese government to review the terms of the credit facility for existing loans and to grant us an increase to be able to complete stalled highway projects,” Gachagua said this Friday during an interview with a radio station. local.

“If we get 1 billion dollars we can give these people (the contractors in charge of the stopped works) the money they are owed so that, while we pay the debt, the roads are completed,” added the president of Kenya.

The vice president stressed that his country wants to be a “good debtor that fulfills its obligations,” but asked its creditors for “indulgence” and “patience.”

In addition, he denied accusations that his government has taken on a lot of debt, arguing that the problem is that most of those loans are in US dollars, which has meant that “with a weak (Kenyan) shilling, interest rates have fired.”

After the World Bank, China is Kenya’s second foreign creditor, where the previous president, Uhuru Kenyatta (2013-2022), repeatedly resorted to loans from Beijing to finance major infrastructure.

So much so, that the country now faces a huge debt, equivalent to 67% of the national gross domestic product (GDP), something that motivated the approval last June of a new law that, among other measures, led to the increase of taxes on fuel up to 16%, which has generated growing tension and social discontent among the population.

China is also a large trading partner of Africa and, according to data from Johns Hopkins University (Baltimore, USA), between 2000 and 2019 entities from the Asian country signed more than 1,100 loan commitments valued at about 153 billion dollars with African governments or publicly owned companies on the continent.

Critics of Chinese expansionism in Africa accuse Beijing of applying the “debt trap,” the alleged strategic use of debt to make African countries captive to Chinese desires and demands.