Kenyan president signals reversal after criticizing Chinese loans

Kenya: Kenya’s newly elected President William Ruto has indicated that the East African country will continue to rely on China to grow and develop its infrastructure, reversing the hostile tone of his campaign.

China is Kenya’s largest bilateral lender and has financed various infrastructure projects, including highways and railways. However, during the presidential campaign, Chinese loans emerged as a significant political issue, with Ruto blaming Kenya’s debt crisis for the loans.

However, Ruto said Kenya and China would expand these ties “for the mutual benefit of our countries, including infrastructure, agriculture, education – among other wide range of issues”, during a meeting with Beijing’s special representative for African affairs, Liu Yuxi. during the meeting. Nairobi on Monday.
“We appreciate our strong friendship with China,” Ruto said of Kenya and China.

“I firmly believe that China-Kenya cooperation will bring greater benefits to both our countries and our peoples,” Liu said in response. The friendship and cooperation between China and Kenya will continue.

Liu led a Chinese delegation to Kenya to attend Ruto’s inauguration. Ruto defeated Raila Odinga in a close election on August 9, which was later upheld by Kenya’s Supreme Court.

On Tuesday in Nairobi, Ruto was sworn in as the country’s fifth president, replacing Uhuru Kenyatta, who held the post for a maximum of two five-year terms.

Several African heads of state and world leaders attended the event, as well as a US delegation led by Trade Representative Catherine Tai. After his election, Ruto promised to stabilize food prices in Kenya, support small business development and increase employment.

“Our immediate agenda is to create an enabling business and enterprise environment, crime-free livelihoods, and to help people in the informal sector organize themselves into stable, viable and creditworthy business entities,” he said. he declares. They said.

Chinese President Xi Jinping congratulated President Ruto and said he was “ready to work with President Ruto to push forward the development of China-Kenya comprehensive strategic cooperative partnership.”

Kenya’s economy has been battered by high unemployment, massive public debt and rapid inflation, all of which are driving up the prices of fuel and basic necessities. Ruto, 55, is currently taking over.

Ruto, who had served as vice president since 2013, took a tough stance on China during the campaign, blaming Beijing for Kenya’s debt problems and foreigners, including Chinese working illegally and running small retail businesses. in Kenya. Accused of threatening to expel civilians. Businesses that Kenyans could run.

Additionally, Ruto promised to disclose all agreements Kenya has signed with China for major projects.

According to Kathleen Kloss, author of Political Violence in Kenya and assistant professor of conflict resolution at Uppsala University in Sweden, if Ruto “follows these statements, Kenya could be heading for a more contentious relationship with China”.
This can prevent further growth while limiting future debt.

Beijing has provided significant funding for large-scale infrastructure projects in Kenya, such as the $4.7 billion railway linking the central city of Naivasha to Nairobi and the coastal city of Mombasa.

Ruto has pledged to contract for a number of projects, including a railway financed by the Export-Import Bank of China.

Wu Peng, director general of China’s Foreign Ministry’s African Affairs Department, however, insisted in Beijing last month that “the deal we signed contained a secret trade deal. It’s a very specific”.

Wu claimed that if Kenya made the deal public, it would be a violation. “The foundation of business conduct is the meaning of the contract. How to do business if the spirit of contract is absent?

Additionally, China provided funding and support for the construction of the 27.1 km (16.8 mi) Nairobi Expressway, which was to be constructed by the China Road and Bridge Corporation at a cost of 688 million US dollars.

Kenya’s debt to China has risen from US$2.1 billion in 2015 to around US$6.4 billion in December 2021, accounting for about two-thirds of all bilateral debt.

Ruto recently indicated that he would try to borrow as much domestically as he does from abroad.

Instead of borrowing from other countries, Ruto said last week, “I look forward to the day when we can borrow from the savings of the Kenyan people to drive our development.” “I am taking over a country with huge debt and our economy is not doing well. Stop digging if you end up in a hole.

Analysts at consultancy Oxford Economics have warned that enmity towards China at the moment, when debt is expected to rise, would be dangerous.

The International Monetary Fund, among other Western governments and organizations, would be pleased with Ruto’s promise to publish the Kenyan government’s contracts with China, but company economist Shani Smit recently wrote that keeping that promise and threatening to deport illegal Chinese workers would strain relations between the two nations.

If Western funding is to fill the potential funding gap should Kenya’s relationship with China deteriorate, “Kenya’s commitment to structural reforms will have to translate into clear progress,” Smit said.

In previous election campaigns, African leaders have taken a tough stance on China only to back down. In the early 2000s, Michael Sata, a former president of Zambia, reportedly raged against Chinese “profiteers”, saying that “Zambia has become a province of China”.

But after winning the presidency, Sata appreciated Beijing’s continued support for infrastructure development.

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