Kenya wants to renegotiate a multibillion-dollar loan from China that was used to build a major railway because though the country is up to date on its payments, it cannot continue with the current 20-year schedule.


Answering questions from a parliamentary committee, Kenya’s incoming transport minister, Kipchumba Murkomen, said the country will have to ask for an extended period to pay, especially in regard to the loans used to build what is known as the Standard Gauge Railway. “There was a strategic decision that was made at that time that we take to invest in the infrastructure and the government of Kenya pays within 15 to 20 years. Now we are choked with loans because we are paying $80 million per year to the lenders for the SGR,” he said. Kenya borrowed $5 billion to build the railway line from the port of Mombasa to the city of Naivasha, west of Nairobi.
The railway was opened for business in 2017 and the government forced businesses to transport goods by rail to help repay the loan. The railway, however, has lost money. “It becomes impossible to be able to pay that loan by revenue that comes from the railways. And even in 50 years, it will not break even if you load the loans to the railways,” Murkomen said. Kenya’s previous government is accused of over-borrowing to finance development projects, which has also increased corruption. China also financed a 27-kilometer expressway in Nairobi, costing $734 million. Most of Kenya’s infrastructure deal with China has been shrouded in secrecy. The agreement that led to the newly built railways has remained secret despite a court order demanding it be made public. With China accounting for one-third of Kenya’s external debt, there have been reports that the misuse of money and corruption are to blame for the country’s debt problems.