In 2017, Kenya proudly unveiled the first section of its Chinese-financed railway. However, two years later, construction halted midway, and plans to connect it to other East African nations seem uncertain.
This halt has economic implications. Kenya is now burdened with repaying loans of approximately $4.7 billion, primarily from Chinese lenders, while the expected revenue from the project falls short.
Still, at Nairobi’s Syokimau railway terminus, the Standard Gauge Railway (SGR) seems thriving. Daily, trains packed with passengers complete the 470km journey from Mombasa. Pauline Echesa, a 53-year-old commuter, praises the scenic route that slices through national parks.
Yet, while passenger operations flourish, the cargo side — designed to be the primary revenue generator — struggles. Containers arriving at Mombasa port were supposed to reach nations like Uganda, Rwanda, and the Democratic Republic of Congo. Now, they terminate their journey in Naivasha, 120km from Nairobi. Most freight trains return to Mombasa without cargo, causing significant revenue losses.
Kenya’s Transport Cabinet Secretary, Kipchumba Murkomen, acknowledges the financial challenges. The government, he notes, will discuss further financing options at the upcoming Belt and Road Summit in China.
China’s Belt and Road Initiative (BRI), launched in 2013, reshaped infrastructure globally, particularly in Africa. But diminishing Chinese funding, combined with growing African debt, raises questions about the initiative’s sustainability. Critics, like the American think-tank Council on Foreign Relations, suggest some BRI projects suffer from opaque bid processes and inflated costs, causing project cancellations and political backlash.
Kingsley Moghalu, Nigeria’s former Deputy Central Bank Governor, also notes a decline in Chinese funding. He estimates it’s decreased from $10-20 billion a decade ago to just $2 billion in recent years.
Kenya’s SGR has felt this decline. However, Murkomen is optimistic, stating that private Chinese investors have expressed interest in the project, provided there’s clarity on returns.
However, Kenyans, already grappling with President William Ruto’s tax hikes, might be skeptical. As of June 2022, China accounted for 19.4% of Kenya’s debt. Ken Gichinga, a Kenyan economist, raises concerns about the country’s growing debt profile and the potential misuse of funds earmarked for the railway.
Furthermore, the Council on Foreign Relations highlights the lack of transparency in China’s loan agreements with countries like Kenya, which has raised concerns both domestically and internationally.
For Kenya’s railway dream to truly materialize, it needs to extend beyond its borders. Ken Gichinga stresses Uganda’s role in this vision. However, there are indications Uganda might align with Tanzania, whose electrified railway offers faster speeds and lower costs. Unlike Kenya, Tanzania sourced funding for its railway from Turkey and Portugal.
Countries should dictate their own futures, asserts Mr. Moghalu, emphasizing that Africa’s relationship with China should be reevaluated.
While Western nations, like the US with its Build Back Better World Initiative, seek to counteract BRI’s influence, China’s potential contribution to long-term development cannot be discounted.
For travelers between Nairobi and Mombasa, the railway represents future progress. “Let us sacrifice to pay the debt and invest in more such projects,” opines Ms. Echesa.
The Kenyan government’s challenge lies in convincing both China and its lenders that the SGR project, if extended to the border and beyond, can be profitable.
