China Faces a Critical Test in Kenya

File image of Kenya's Standard Gauge Railway that China financed and built as part of the Belt and Road Initiative. Simon Mania/AFP

Kenya’s difficulties in servicing its debts for the newly-built, Chinese-financed Standard Gauge Railway (SGR) is nearing a breaking point. Even before the COVID-19 outbreak, the railway failed to meet passenger and cargo volume targets and now the economic downturn brought on by the pandemic is making the problem even more acute.

The railway is losing money at an unsustainable pace of $9.2 million a month making it inconceivable that Kenya Railways will be able to repay its Chinese creditors at the current rate.

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by Eric Olander

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