Kenya debt situation

Coal in Kenya
9 min readApr 12, 2023

Kenya’s public debt stock crosses the $72 billion mark — February 07 2023

Kenya’s stock of public debt crossed the KSh9 trillion (USD $72 billion) mark for the first time in December, pushing the country closer to hitting the KSh10 trillion (USD $80 billion) ceiling set by Parliament in June last year. This at a time a weak Kenyan shilling has piled pressure on the country’s external debt repayments with some 69.3 per cent of foreign debt denominated in US dollars. [Much more detail included.]

Kenya-China relations strained as new government grapples with a debt crisis — 15 March 2023

In February, a group of Kenyan traders in Nairobi organized a demonstration against Chinese traders who they claimed were engaging in unfair trade practices and taking business away from local entrepreneurs. The traders marched to the deputy president’s office demanding an end to what they called a “China invasion” …

The Chinese store row is now at the heart of a simmering strained relationship that has previously only been happening behind closed doors as Kenya struggles to restructure its Chinese debt.

When the newly elected Kenyan president, William Ruto took over power last year, he inherited a country that is now drowning in public debt to the tune of approximately US $56 billion with China as the single largest bilateral lender.

Kenya became the third country in Africa after South Africa and Egypt to sign on to the China Belt and Road Initiative (BRI) in 2017 under President Uhuru Kenyatta.

EMPTY COFFERS: Kenya’s government is struggling even to pay its ministers — April 2023

Most county government workers last received their paychecks in January as an acute cash crunch bites Kenya’s treasury

For the first time since it gained its independence in 1963, the government of Kenya has failed to pay its employees.

Ministers, legislators, and civil servants are yet to receive their March salaries. Most county government employees and some civil servants were last paid reportedly in January. The national treasury needs at least $434 million to pay salaries and pensions every month.

All pointers indicate that the crisis may persist for months. National treasury and economic planning cabinet secretary Njuguna Ndung’u has warned of tough times ahead, saying, the government is in a “financial fix.”

Kenya’s financial crunch and economic crisis have been in the making since at least the 2007–08 post-election violence, according to observers.

However, his government’s wasteful spending was called out yesterday (April 10) by David Ndii, chair of the president’s council of economic advisers: “Government is extremely wasteful, there is not a single day that I am not exasperated by not just how wasteful it is but by how deliberate it is and how unbothered people are.”

Meanwhile, the country reportedly loses at least $18 million every day to corruption.

Progression over 2021–2022

IMF Loan to Support Economic Recovery in Kenya — March 2021

Don’t Lend Our Government, Debt-Weary Kenyans Demand of IMF — 10 April 2021

The International Monetary Fund has walked into a storm of social-media criticism after approving a $2.34 billion three-year financing package for Kenya.

Don’t give us $2bn loan, Kenyans tell IMF

A $2.34 billion bailout for Kenya from the International Monetary Fund (IMF) has provoked anger among its citizens rather than relief.

Since the three-year package was disclosed, the IMF’s social media sites have been peppered with complaints under the hashtag #StopGivingKenyaLoans.

World Bank, IMF lending to Nairobi rise as Kenya-China loan deals drop — February 21 2022

World Bank and the International Monetary Fund (IMF) have stepped up lending to Kenya over the past three years, which has seen Chinese loan deals reduce, firming the grip of Bretton Woods institutions on East Africa’s biggest economy.

World Bank lending — $9.8 billion USD
IMF lending — $1.8 billion USD
Chinese loans — $6.9 billion USD

China’s influence on Kenya’s mega projects development started gathering steam with the construction of the Thika Superhighway between January 2009 and November 2012… China Road and Bridge Corporation, a subsidiary of China Communications Construction Company, has since bagged the lion’s share of Kenya’s mega projects — at least two railways, two ports and road projects.

Beijing became the largest bilateral creditor after its loans to Kenya grew from Ksh63 billion ($554 million) to Ksh478 billion ($4.2 billion) in President Kenyatta’s first term.

Belt and Road in Kenya: COVID-19 Sparks a Reckoning with Debt and Dissatisfaction

China’s Relatively Small Share of Kenya’s Total Public Debt — February 22 2022

Kenya’s total public debt now stands at $72.2 billion with $6.92 billion or just 9% owed to Chinese creditors, according to new figures from the Treasury in Nairobi. When measured against Kenya’s total external, China’s share accounts for about 19%.

China locks out Kenya from new debt relief deal — August 25 2022

The deal announced last week will see Beijing forgive 23 matured interest-free loans for 17 unnamed African countries, which are classified as least developed countries. [Kenya was elevated to middle-income status.]

Beijing made the announcement during the Forum on China-Africa Cooperation that seeks to boost ties between China and its African allies.

China, which accounts for about one-third of Kenya’s 2021–22 external debt service costs, is the nation’s biggest foreign creditor after the World Bank.

Kenya faced a deteriorating cash-flow situation, marked by falling revenues, worsening debt service obligations, and the effects of the Covid-19 pandemic. Kenya last year asked for an extension of the debt repayment moratorium from bilateral lenders, including China, by another six months to December 2021, saving it from committing billions to Beijing lenders.

Kenya Denies It Defaulted on Debt to China — 14 Oct 2022

The Kenyan government has denied media reports that Chinese banks have fined the country $11 million for failing to pay back loans used to finance a major railway. The East African nation borrowed $4 billion to construct the Standard Gauge Railway from the port of Mombasa to Naivasha town, some 100 kilometers from the capital.

Kenya Wants China to Extend $5 Billion Debt Repayment — 19 October 2022

  • Transport Secretary-designate says loan is choking the economy
  • Kenyan government is seeking to reduce debt vulnerabilities
  • Kenya plans to ask China for a longer repayment period on $5 billion of loans it used to build a railway, Transport Secretary-designate Kipchumba Murkomen said. Servicing the Export-Import Bank of China loans, which mature in 15 to 20 years, is choking the economy.

In an about-face, Kenya’s new government signals intent to renegotiate Chinese loans — 22 October 2022

  • Kenya’s new president, William Ruto, had said during his campaign that he would not go ‘anywhere near restructuring debt’
  • But his transport secretary nominee says that current repayment terms are not favourable and the country is ‘choked by loans’
  • Kenya’s new administration has signalled that it plans to renegotiate Chinese loans for the debt the country took on to build a major railway and seeks to extend the repayment period to up to 50 years.

China loans to Kenya fall for first time in 20 years — 24 October 2022

Chinese loans to Kenya have dropped for the first time in 15 years as Beijing adopts more cautious lending in Africa where some nations have reached the limit of their borrowing capacity and the prospect of default looms.

Data from the Treasury show China’s total lending dropped to $6.83 billion in June from $7.05 billion a year ago and $3 billion in 2016.

Available public records show that Chinese loans to Kenya dropped marginally in 2022. The rare fall in Chinese debt emerges in a period when the World Bank and the International Monetary Fund (IMF) have stepped up lending to Kenya, firming the institutions’ grip on the country’s economy.

At the triennial Forum of China-Africa Cooperation held in Senegal in November 2021… over the next three years, the Chinese president said, the country would cut the headline amount of money it supplies to Africa by a third to $40 billion and, he implied, redirect lending away from large infrastructure towards a new emphasis on SMEs, green projects and private investment flows…

NikkeiAsia OPINION: Africa needs more help with its Chinese debts — November 2022

Kenyan officials said last month they would ask China to extend the repayment period on $5 billion worth of loans, with an incoming cabinet minister telling parliament that the debt is “choking” Nairobi’s economy.

China now holds the financial fate of much of the Global South in its hands, accounting for almost 40% of the bilateral and private-creditor debt payments the world’s poorest countries are due to make this year, according to World Bank Group President David Malpass.

Kenya is laboring under $82 billion in debt, a third of which is owed to China. The loans Nairobi took out from the Export-Import Bank of China to finance the railway to Mombasa carry terms of 15 to 20 years, but officials say decades more time will be needed for repayment, given that the line is unlikely to be profit-generating even after 50 years.

Around half of all Chinese loans to Africa remain hidden, according to estimates by AidData, which has the world’s largest data set on China’s development financing.

Liam Gibson is the Taipei-based founder of Policy People, an online platform for think tank professionals.

Analysis: The response to debt distress in Africa and the role of China

At present, 22 low-income African countries are either already in debt distress or at high risk of debt distress.

Chinese lenders account for 12 per cent of Africa’s private and public external debt, which increased more than fivefold to $696 billion from 2000 to 2020. China is a major creditor of many African nations, but its lending has fallen in recent years and is set to remain at lower levels. This situation is likely to worsen over 2023, limiting the ability of African nations to raise the necessary finance to deliver broader social improvements for their populations and respond to climate change.

China did not cause African debt distress in most cases, but it is key to finding a solution.

Bits of older background:

Kenya: Want Growth? Look East (2011)

The Chinese foray into Kenya began in April 2006, (some eight months after President Kibaki’s visit to China) when President Hu Jintao made an official visit to Nairobi… China is also leading the pack in securing lucrative infrastructure, energy and telecommunications contracts.

Eurobond situation (2014)



Coal in Kenya

Compiled research and news about ongoing attempts to develop a coal industry in Kenya. #deCOALonize