Kenya and Uganda Celebrate Railway Extension Amid Debt Concerns
KISUMU, Kenya (AP) – The presidents of Kenya and Uganda presided over a ceremony near their shared border Saturday, marking the completion of a long-delayed extension to a Chinese-built railway. While hailed as a potential economic catalyst for East Africa, the project is shadowed by concerns over Kenya’s mounting debt to China.
The Standard Gauge Railway (SGR) currently connects the port city of Mombasa to Nairobi and Naivasha in Kenya. The newly completed extension is intended to reach Kisumu, Uganda, with further phases planned to reach Malaba, a town on the Kenya-Uganda border. Officials estimate the line could reach Kisumu by June 2027.
Kenyan President William Ruto described the rail link as a “generation-defining project,” arguing it will significantly reduce logistics costs and boost competitiveness across East Africa. Ugandan President Yoweri Museveni echoed this sentiment, stating the railway would address inefficiencies within his country’s infrastructure, calling the current system “irrational and wasteful.”
However, the railway’s construction has come at a steep price. Kenya spends approximately $1 billion annually servicing debts related to the SGR, the majority of which were borrowed to finance the project. Last year, the railway generated roughly $165 million in revenue, despite strong growth in passenger and cargo numbers. A report by Kenya’s auditor general revealed over $260 million was lost to penalties and interest on late debt payments.
China lent Kenya $9.7 billion between 2000 and 2019, with approximately half of that funding allocated to the railway, according to the Chinese Loans to Africa Database by Boston University. Lending from China stalled between 2020 and 2023 as Kenya struggled with repayments, coinciding with a broader shift in China’s lending strategy towards Africa.
Kenya is now financing the new phase of the railway through future cargo taxes, partnering with Chinese transport firms for construction. The overall cost of the extension is estimated to exceed 500 billion shillings ($3.9 billion), according to Kenya’s Business Daily.
The railway extension is seen as crucial for strengthening trade links throughout East and Central Africa, potentially reaching landlocked nations like Uganda, Rwanda, South Sudan, and the Democratic Republic of Congo.
Despite the financial challenges, Ruto insisted his government has a sound financial plan for the project, emphasizing its potential to create jobs and alleviate road congestion.
