Kenya has asked China for 30 more years to pay back the $5bn it owes for the standard gauge railway (SGR) connecting Mombasa to the interior of the country.
It was gathered that the original duration for repayment was put at 20 years.
But speaking at the Kenyan parliament, the Transport Minister-designate, Kipchumba Murkomen said payments to China’s Export-Import Bank were “choking the country”.
He added, “If we can manage to renegotiate to 50 years, then it will ease the burden”.
He also pledged that the contract that Kenya signed with China would be made public.
The speech came a week after it was disclosed that Chinese banks had fined Kenya $11m in the year to June over missed repayments.
However, Kenyan economist Gerrishon Ikiara told Voice of America that Kenya had good relations with China, and that would help with negotiations.
He said: “Friendly countries always negotiate. Because China may have its own issues it may have borrowed itself, so it’s also looking at its economy and asking what’s our ability to adjust to the terms Kenya wants. That’s why friendly relations are very important.”
Further, it was learnt that Kenya’s debt distress is partly a result of the economic effects of the pandemic and part of the commercial performance of the SGR. The Mombasa–Nairobi section of the link, which opened in 2017, made a loss of $28m in the 12 months to June.
This part of the line cost some $3.6bn, 90% of which was met by a loan from the Export-Import bank.
