Amid a Worsening Debt Crisis, Kenya Struggles to Finance New Infrastructure and All Those Useless “White Elephants”

The Kenyan government, like a lot of African governments, is struggling to find the right balance between continuing to pay for badly-needed new infrastructure while at the same time servicing its enormous debts for older projects — many of which are now so-called “white elephants” that were never built or used.

The situation has been compounded by the fact that once abundant Chinese financing is, for the most part, no longer available and the Treasury instead is forced to either take on more domestic debt or go to the bond markets where interest rates tend to be higher.

  • NEW INFRASTRUCTURE: The Treasury requested $1.8 billion in funding for the 2021-2022 budget to build 6,000 kilometers of new roads. The request did not mention how it would underwrite the cost of that construction. (THE STANDARD)
  • OLD INFRASTRUCTURE:  Kenya’s Finance Cabinet Secretary Ukur Yatani told Spice FM radio this week that the government is no longer servicing debts for infrastructure projects that were either not completed or never started. He said the Treasury is working with “partners” but did not specify which creditors, in particular, would be impacted. (THE STANDARD)
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The post Amid a Worsening Debt Crisis, Kenya Struggles to Finance New Infrastructure and All Those Useless “White Elephants” appeared first on The China Africa Project.



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