Kenya has struck a transformative financial and investment package worth roughly $1 billion with China, marking a bold step in deepening economic and infrastructural ties between the two nations.
The landmark deal was reached during President William Ruto’s five-day state visit to Beijing—the third since taking office in 2022—and includes 20 agreements spanning rail, highways, agriculture, manufacturing, technology, and tourism.
At the core of the package are high-impact transport projects. China has recommitted to extending the Standard Gauge Railway (SGR) from Naivasha to Kisumu (Phase 2B) and onward to Malaba at the Uganda border (Phase 2C). The SGR, which already links Mombasa and Nairobi, was initially financed by a $3.6 billion loan—90% from China’s Exim Bank.
Additional road commitments include the dualling of the Northern Bypass, Mau Summit Highway, Kiambu Road, and Nithi Bridge. Nairobi is also slated for a smart traffic management system featuring intelligent cameras and variable traffic lights.
In a separate investment arm, Chinese companies pledged Sh126 billion (approximately $1 billion) for projects aligned with Kenya’s Bottom-Up Economic Transformation Agenda (BETA). Highlights include:
- $430 million (Sh55.6 billion) to Zonken Group for aloe processing and vineyard farms in Baringo (372 acres, 500 jobs).
- $320 million (Sh41.4 billion) for manufacturing:
- $150 million to China Wu Yi for a Special Economic Zone in Kikambala (5,000 jobs).
- $100 million to Rongai Steel in Lukenya for plant expansion.
- Smaller allocations for apparel and a smart transport park with Anhui Jiubao.
- $230 million (Sh29.7 billion) for tourism through Hunan Conference Exhibition, leasing and refurbishing Hilton and Intercontinental hotels in Nairobi.
In total, these ventures promise approximately 10,500 new jobs—7,000 in manufacturing, textiles, and solar; 5,000–6,000 in smart transport and steel; and hundreds more in agriculture and hospitality.
While Kenya carries significant Chinese debt—about 63 percent of its bilateral debt (roughly Sh691 billion or $5.4 billion) is owed to Beijing, largely from SGR loans—President Ruto has vowed to manage fiscal risk. He is focusing on enhancing domestic revenue, curbing waste, and avoiding default, while seeking diverse financing options such as issuing bonds in the UAE.
The government has denied exploring debt restructuring, despite confusion caused by an earlier, retracted statement on concessional financing negotiations with China.
Beyond economics, Kenya and China formalised their relations as a “Comprehensive Strategic Partnership,” pledging deeper cooperation in education, science, digital infrastructure (including fibre-optic networks and panda bonds), healthcare, and even direct flights between Nairobi and Beijing.
President Ruto also called for reform in global governance, including a more representative United Nations and Bretton Woods institutions, positioning Kenya as an emerging Global South voice alongside China.
This $1 billion accord offers Kenya significant boosts in transport, industrialisation, and employment—but its success will depend on whether infrastructure gains can outweigh growing debt burdens and translate into sustainable, inclusive growth over the coming decade.
– By Nusurah Nuhu
