China’s loans for President William Ruto’s first full-year budget will be the smallest in 16 years as Beijing adopts a more cautious approach to lending in Africa where some nations have reached the limit of their borrowing capacity and the prospect of default looms.
Treasury documents made public on Tuesday show that Chinese funding for the year starting July will fall to Ksh1.74 billion ($12.7 million) from Ksh29.5 billion ($216.5 million) in the current fiscal year and Ksh71.2 billion ($522.5 million) in 2017.
The rare fall in Chinese loans emerges in a period when the World Bank and the International Monetary Fund (IMF) have stepped up lending to Kenya, firming their grip on the country’s economy.
Nairobi has been a major beneficiary of China’s loans for the development of mega infrastructure such as roads and a modern railway over the last decade, making Beijing the largest bilateral creditor since 2015.
In the last few years, China, which built the Thika Super Highway during former President Mwai Kibaki’s term and the standard gauge railway (SGR) under President Uhuru Kenyatta, has not approved any new funding for a mega infrastructural project.1