President William Ruto will ask China for a U.S.$1 billion loan to complete stalled road construction projects, when he travels to Beijing later this month, Reuters reports.
Ruto’s plan, which also includes a request to lengthen the maturity periods of existing loans, marks a shift in his stance on Chinese debt after his coalition criticised his predecessor Uhuru Kenyatta’s China borrowing spree, in his 2022 election campaign.
The current China loans, which stand at more than U.S.$8 billion, were used by Kenyatta’s government to construct infrastructure such as roads, but many of these projects have since stalled after contractors withdrew over unpaid bills.
Deputy President Godfrey Gachangua told a local radio station that the president will ask China for more time to repay the additional loan. “If we get U.S.$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,” he said.
The 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 shilling.
As part of austerity measures to ensure state agencies adjust to global economic crises, President Ruto has directed government agencies to slash their expenditure by 10% in the current financial year, to align with available resources.