On Wednesday, October 18, China’s President Xi Jinping held a meeting with President William Ruto who was in China to attend the third Belt and Road Forum for International Cooperation. 

This was his maiden trip to China, a visit which was keenly watched by diplomatic observers, as Dr Ruto was expected to make a U-turn on his earlier rhetoric against Chinese loans. 

During last year’s election campaigns, China was at the heart of the August 9 polls, with President Ruto, then the deputy president and his political lieutenants making China a campaign agenda, and repeatedly criticised the then government for borrowing from China and spreading false narratives about China’s role in Kenya’s economic difficulties. 

At the time, one of his key allies even petitioned the Parliament to investigate all government contracts involving Chinese companies since 2014. Dr Ruto also promised to deport Chinese nationals as his confidants mobilised motorists to boycott the use of the China-funded Nairobi Expressway. On the other side, his opponent Raila Odinga said he intended to renegotiate loans with some creditors, including China if he won. 

China is Kenya’s largest bilateral lender with the majority of credit facilities primarily directed to funding the construction of the Standard Gauge Railway (SGR). Data from the National Treasury indicate that Kenya owed China Ksh856.3 billion as of the end of April 2023, a Ksh21.7 billion increase in the debt stock from Ksh834.6 billion at the end of March. 

In addition, data from the latest external public debt register shows the bulk of Kenya’s debt to the Chinese is owed to the Exim Bank of China with the amount outstanding as of June 2022, standing at Ksh809.1 billion. Apart from SGR, other major projects funded by Chinese credit include the e-government project, the Olkaria IV geothermal production wells drilling, and the construction of the Kenyatta University Teaching Research and Referral Hospital (KUTRRH). 

Beijing 

The October 17 to 18 forum in Beijing, attended by a Kenyan delegation led by President Ruto, holds great diplomatic significance for China. It’s the most important event of the year and a notable celebration of the 10th anniversary of the Belt and Road Initiative. 

The Belt and Road Initiative, initiated by China in 2013, aims to create trade and infrastructure networks connecting Asia, Europe, Africa, and beyond along the historic Silk Road trade routes. 

President Xi Jinping pointed out that China and Kenya have a long history of friendship. “Over the past 60 years since the establishment of diplomatic relations, the two countries have treated each other as equals and supported each other and have become good friends of mutual trust and good partners for win-win cooperation,” the Chinese Ministry of Foreign Affairs stated.

President Ruto encouraged Chinese investors to take advantage of Kenya’s conducive business environment to foster mutually beneficial partnerships. He observed that collaboration in critical sectors of the economy will drive economic growth for both nations. “We have an array of opportunities in infrastructure, ICT, agriculture and energy and I encourage you to invest there.” The president made the remarks during a meeting with Mr Li Xi, a senior member of China’s Communist Party-Political Bureau in Beijing, China. 

China’s President Mr Xi pledged his government’s support to its companies operating in Kenya. 

Transport Cabinet Secretary (CS) Kipchumba Murkomen said the government is determined to secure a deal with China for the completion of the SGR to Malaba, with the ultimate goal of reaching Kampala, Uganda.

“I’m glad that our ministry is implementing several projects with the Chinese government. I thank the Chinese government for always working with us to implement our infrastructural projects and look forward to closer partnerships on roads, rail, ports and airports through public-private partnerships and government-to-government agreements. I also appreciate the willingness of the Chinese government to work with us to find the most appropriate framework for extending the standard gauge railway from Naivasha to Malaba, and thereafter to Kampala & beyond,” the CS said.

$97.2 billion (Ksh14.5 billion) worth of cooperation projects were signed between China and various countries during the third Belt and Road Forum.

Public-private partnerships 

During the China visit, the President assured investors that the government had put in place robust measures to improve the business environment in the country to enhance private investments.

Speaking during the Kenya-China Investors’ Roundtable in Beijing, Dr Ruto told the Chinese investors to use Kenya’s competitiveness, geostrategic location and stability as their gateway to access the huge African market.

“Kenya has established a strong public-private partnership (PPP) framework, with robust policy instruments and other measures to protect investments and minimise risk across every sector,” the President said. 

The implementation of public-private partnerships lies with the Public-Private Partnership (PPP) Directorate, which sits at the National Treasury and is tasked with originating, guiding and coordinating the selection, ranking and prioritising of public-private partnership projects within the public budget framework.

As of September 2021, the directorate had approved seven PPP projects in the energy and road sectors, including the $667.8 million Nairobi Expressway project. The seven approved PPP projects have a total value of $1.2 billion and are largely funded by a debt-equity mix. 

Projects 

In July, President Ruto said the government will work closely with China on infrastructure development, climate change, ICT, education and security. 

Speaking at State House, Nairobi, during a high-level meeting with Wang Yi, the Member of the Political Bureau of the Communist Party of China Central Committee and Director of the Office of Central Committee for Foreign Affairs, the President noted that the government plans to upgrade the Jomo Kenyatta International Airport (JKIA) and the ports of Mombasa and Lamu.

Other projects in the pipeline include the development of a new Greenfield terminal and a new runway at JKIA, and the dualling of Rironi-Naivasha-Nakuru-Mau Summit Road which are expected to elevate the country’s competitiveness. 

According to the President, these projects can be pursued either under the PPPs or government to government. “We are ready to expedite discussions and conclude on details on the proposed projects for implementation,” the President said at State House. 

Kenya has assured Chinese investors of the government’s commitment to providing security to everyone, with Mr Yi saying China will continue working with Kenya for the two country’s prosperity. “China will consider the Kenya government’s priority areas of interest,” Mr Yi said.