Today, the country ranks among the top five countries with a huge amount of debt to China valued at Ksh866 billion (USD6.7 billion).
According to the Wealth of Geeks, a finance-centered outlet, Kenya ranked behind Ethiopia, Sri Lanka, Angola, and Pakistan.Globally, Pakistan owes China the most debt valued at $26.6 billion.
The International Monetary Fund (IMF), which is also part of Kenya’s foreign lenders, has ranked Kenya among countries with high debt distress.
In recent weeks, the country faced unprecedented protests countering President William Ruto’s administration’s decision to roll out a slew of taxes in effort to lower the country’s dependence on foreign borrowing.
The Budget 2024 estimates that the country needs Ksh3.9 trillion to finance development projects.
The Finance Bill, however, aimed to raise an additional Ksh346.7 billion in its budget and reduce the budget deficit from 5.7 per cent to 3.3 per cent.
However, Kenyan citizens, especially Gen Zs, took to the streets demanding total rejection of the bill arguing that it sought to shore up the cost of living which was already high riding on the Finance Bill 2023.
If rejected, however, the administration may be forced to look outside to finance its budget through foreign borrowing which had been declared unsustainable by experts.
Most of the debts Kenya owes to foreigners, including China, were expected to mature this ending financial year. The country, however, diligently paid the debt.
Towards the end of last year, the debt rose to its highest due to the volatility of the Kenyan Shilling against the Dollar even as President William Ruto unveiled plans to secure an additional USD1 billion from China.
At the time, experts observed that the debt would push Kenya’s loans to unsustainable levels, especially since most of the projects financed by the loan including the Standard Gauge Railway struggled to break even, forcing the taxpayers to repay the loans.
