Kenya spends record Sh72 billion on China debt in Q1

Interest Kenya paid for outstanding Chinese loans more than doubled in three months through September, official data shows, pushing up repayments to a record-high of Sh72.07 billion in the review period.

Latest expenditure disclosures by the Treasury show interest repayments wired to Beijing, mainly through the Exim Bank of China, surged to nearly Sh24.46 billion in the first quarter of the current fiscal year from Sh11.85 billion a year ago.

The 106.41 percent jump in interest costs was because of a rise in the floating rate for Chinese loans amid the weakening of the shilling against the US dollar.

That raised Kenya’s bilateral debt repayments towards China-funded infrastructure projects by nearly half (48.50 percent) from Sh48.53 billion in the first quarter of the last financial year ended June 2023.

The bulk of the loans are to the Exim Bank of China after Kenya repaid debts accruing to the China Development Bank last financial year.

Exim Bank of China funded about 90 percent of Sh566.12 billion Kenya spent on building the near 700-kilometre standard gauge railay from the port city of Mombasa to Suswa near Naivasha — nearly 100km northwest of Nairobi.

Source: Business Daily

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