The presidents of Kenya and Uganda yesterday met near their shared border to mark the multi-billion dollar, long-delayed extension of a Chinese-built railway that has left Kenya heavily in debt.
The Standard Gauge Railway, built from 2013 to 2019, connects the Kenyan port of Mombasa to Nairobi and on to the lake town of Naivasha, but China refused further lending before it could be extended to Uganda as planned.
Kenya spends roughly US$1 billion a year servicing Chinese debt, most of it borrowed to build the railway.
Photo: AFP
That is far more than the line generates in revenue — about US$165 million last year — even if passenger and cargo numbers have been growing strongly over the past year.
A report by Kenya’s auditor-general last year found more than US$260 million had been wasted just on penalties and interest from late debt payments.
Yet, despite the controversy over the cost, Kenya has been keen to finish the line.
Kenyan President William Ruto at a ceremony with Ugandan President Yoweri Museveni said the rail link would “define generations.”
The line would slash logistics costs that “undermine competitiveness” in east Africa, he said.
If the ambitious building schedule is to be believed, the line is due to reach Kisumu by June next year. The next phase would then take the line to Malaba, a town on the border.
“Cargo takes an average of 80 hours to move from Mombasa to Malaba and more than 100 hours to reach Kampala,” Ruto said. “We cannot build prosperity on inefficiency.”
Museveni said the line would reduce the inefficiencies in his country’s infrastructure.
“The railway is part of the rationalization of our transport system, especially on the Uganda side, which is irrational and wasteful,” he said.
Ruto broke ground on the next phase in Narok County on Thursday, saying that it would create jobs and reduce road congestion.
Treasury estimates said the overall cost would be more than 500 billion shillings (US$3.9 billion), Kenya’s Business Daily said.
Kenya is not taking more cash from Chinese banks this time — instead borrowing against future cargo taxes — although it is partnering with Chinese transport firms to build the new phase.
China lent Kenya US$9.7 billion between 2000 and 2019, according to the Chinese Loans to Africa Database by Boston University, with around half of that going to the railway.
It stopped lending from 2020 to 2023 as Kenya struggled to make repayments, at a time when China revised its broader lending strategy in Africa.
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