Kenya, Uganda presidents to meet for rail link

The presidents of Kenya and Uganda were set to meet near their shared border Saturday 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 its capital, Nairobi, and on to the lake town of Naivasha, but China refused further lending before it could be extended to Uganda as planned.

Kenya now spends roughly $1 billion a year servicing Chinese debt, most of it borrowed to build the railway.

That is far more than the line generates in revenue — around $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 $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.

President William Ruto broke ground on the next phase in Narok County on Thursday, arguing that it will “catalyse regional economic growth, and firmly position Kenya as a leading transport and logistics hub in eastern and central Africa”, while creating jobs and reducing road congestion.

We have thought through this project (and)… its finance,” he insisted.

Ruto is due to meet his Ugandan counterpart, Yoweri Museveni, in Kisumu near the Kenya-Uganda border, where the line is due to reach by June 2027 if the ambitious building schedule is to be believed.

The next phase will then take the line to Malaba, a town on the border.

Treasury estimates say the overall cost will be more than 500 billion shillings ($3.9 billion), according to Kenya’s Business Daily.

Kenya is not taking more cash from Chinese banks this time — instead borrowing against future cargo taxes — though it is partnering with Chinese transport firms to build the new phase.

China lent Kenya $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 to Africa.

Kenya considers the railway extension crucial for strengthening trade through east and central Africa, hoping to reach landlocked countries such as Uganda, Rwanda, South Sudan and the mineral-rich Democratic Republic of Congo.

AFP