Kenya’s President Ruto Seeks $1 Billion Loan from China with an Extended Repayment Period

President William Ruto will request a loan of U.S.$1 billion from China to complete stalled road construction projects,Ruto’s plan, which also includes asking for an extension on existing loans, signals a change in his stance on Chinese debt. Previously, his coalition criticized his predecessor Uhuru Kenyatta’s borrowing from China during his 2022 election campaign.

The current China loans amount to over U.S.$8 billion and were used by Kenyatta’s government for infrastructure projects like roads. However, many of these projects have halted due to unpaid bills leading contractors to withdraw.

Deputy President Godfrey Gachangua stated on a local radio station that Ruto will request an extension on the repayment period for the additional loan. He said, “If we receive U.S.$1 billion, we can pay the owed money to contractors so they can return and complete the roads as we repay the debt.”

Official data shows that the government is using approximately half of its revenue to repay debts that are due, putting strain on its finances. The situation is worsened by foreign debt repayments and the sharp depreciation of the Kenyan shilling.

As part of austerity measures to adapt to global economic crises, President Ruto has directed government agencies to reduce their expenditure by 10% in the current financial year to align with available resources.