Kenya is seeking China’s approval to convert a dollar-denominated $5 billion loan into yuan in a bid to ease mounting pressure on its foreign reserves. This loan specifically financed the construction of Kenya’s modern Standard Gauge Railway. By switching the currency, Nairobi hopes to significantly reduce its annual debt servicing costs, which now approach $1 billion paid to China. The request comes at a critical time, as high global interest rates and a strong dollar have dramatically increased the nation’s debt burden. With the International Monetary Fund flagging Kenya as being at high risk of debt distress, this reprofiling could provide crucial fiscal breathing room. The outcome now rests on Beijing’s response, marking a significant moment in the two nations’ financial diplomacy.
Africa News
