As Kenya continues to struggle with the ever-growing public debt, 2019 will be no different as the repayment of the Standard Gauge Railway set to increase by nearly three times.
Kenya’s public debt now starts at 5 trillion shillings or 56 percent of the country’s gross domestic product (GDP) with analysts saying it is likely to hit 6 trillion shillings by the end of 2019.
The largest lender to Kenya is China and one of the largest project ever funded by a loan from China is the Standard Gauge Railway (SGR) which runs from Mombasa to Nairobi.
After the completion of the SGR, Kenya was given a grace period of five years from May 2014 and it expires in July this year. This means the repayment of the loan is likely to spike from 36.85 billion shillings currently to nearly 82.85 billion shillings.
Kenya took a loan of 324.01 billion shillings from Exim Bank of China that was meant to facilitate the construction of the 385 kilometers of Mombasa-Nairobi SGR line that was set to be repaid within a period of 15 years.
Stakeholders have raised concerns about Kenya’s roaring appetite for debts from other countries with both the World Bank and the International Monetary Fund (IMF) saying the country might not be able to pay back all the debts within the stipulated time.
In December, word went round that the Exim Bank from China was plotting to take over the Mombasa Port if Kenya failed to repay the loan on time. The government disputed the claims saying they were unfounded.
China also moved to issue a statement saying that it had no intentions of taking over the Mombasa Port and called on African countries “not to be scared.”