In 2017, the first section of Kenya’s Chinese-built railway was launched with great enthusiasm. However, two years later, progress on the rail network ground to a halt in the middle of Kenya, stalling the ambitious plan to connect it with other landlocked East African countries.
The project faced financial challenges, with Kenya servicing loans of approximately $4.7 billion, primarily borrowed from Chinese banks. Despite the setbacks, the passenger side of the business thrived, transporting commuters efficiently between Mombasa and Nairobi. Still, the success of the passenger service alone couldn’t cover the loans, as the primary revenue source was expected to come from the cargo sector.
The railway was designed to bring containers from Mombasa port to landlocked countries such as Uganda, Rwanda, and the Democratic Republic of Congo. However, the rail currently only extends to Naivasha, leaving it far from the Ugandan border. Consequently, most freight trains return to Mombasa empty, resulting in a significant loss of potential income.
Kenya’s Transport Cabinet Secretary, Kipchumba Murkomen, stressed that completing the railway project would be more productive but acknowledged the financing challenge. The government was actively exploring funding options, including discussions at the upcoming Belt and Road Summit in China.
China’s Belt and Road Initiative (BRI), launched in 2013, has been instrumental in reshaping global infrastructure. However, the future of the BRI is uncertain as China reduces funding, and African countries grapple with mounting debt. Some critics argue that certain BRI investments involved opaque processes, inflated costs, and political backlash, while internal issues have curtailed funding.
Kenya is open to various funding options, including the involvement of private sector players from China who are willing to invest. They may consider a grace period to first service the existing loans.
However, concerns about the heavy debt profile of the country and the opacity surrounding the deals with China weigh heavily on the minds of Kenyans. Transparency and public confidence are essential to address these issues.
To fulfill its initial vision, Kenya’s railway project must expand transnationally, connecting to landlocked countries as initially planned. But competition in the region is fierce, with Tanzania offering a more cost-effective and electrified rail network. This highlights the need for African nations to assert greater control over their infrastructure development and seek partnerships that align with their interests and economic development.
Western countries have also sought to counter China’s BRI with initiatives like US President Joe Biden’s Build Back Better World Initiative. However, the challenge remains to balance immediate financial concerns with the long-term benefits of such infrastructure projects, as many commuters in Kenya see value in investing in their country’s future.