Kenya hopes that the rail will increase intra-Africa trade, which was only around 12% in 2019, compared to America, Europe, and Asia at around 60-80%. Increasing domestic and intracontinental trade within Africa is a vast benefit to all countries involved as it mitigates their necessity on foreign loans and allows them to build up their own country and region. Not only will the rail and other massive modern projects such as these bolster trade, they will also introduce or expand many industries employing thousands of people and boosting the economy further. Likewise, thousands of students are benefitting from Chinese scholarships and training opportunities alongside the infrastructure construction.
Kenya Railways Corporation (KRC) was scheduled to take over all operations on the SGR from Afristar starting in May of 2022 and has been planning to do so since March of 2021. The takeover is happening on time and KRC has already been handling ticketing, security, and fuelling functions since last year. Philip Mainga, KRC’s managing director, stated that “The corporation has now assumed the loading and offloading functions from Africa Star Railway Operation Company and in terms of percentages we can say that we are now at 60 percent overall.” The takeover by KRC was initially scheduled to begin only after about 10 years of SGR function, around 2027, but after only three years of operation, in September of 2020, the railway reported a total loss of ~$200 million. The primary cost contributing to the situation was operations, managed by Afristar, amounting to around $120 million annually. Once KRC takes over operations, the operating cost is expected to decrease drastically, hopefully turning the shortfall around and further creating economic opportunities for the local people as the takeover continues.
The SGR was 90% funded by a Chinese loan in two parts: $2 billion due between Jan 2020 - 2029 and $1.6 billion between July 2021 - Jan 2034.
Kenya has started to make payments. In January 2021, Kenya requested a 6 month pause on payments, which was granted. When Kenya requested the pause it had about $76 billion in external debt, only around $7 billion of which is owed to China. Despite the actual situation, accusations of Chinese loans being ‘debt traps’ have often been made by former colonial powers in the west. Ukur Yatani, Cabinet Secretary of National Treasury and Planning in Kenya, said that interest rates from China are 3% annually, which are lower than commercial lending rates.
Chinese Ambassador to Kenya, Zhou Pingjian, said “it is the lack of infrastructure that has held up the development of many countries. Infrastructure development has been a top priority for China-Kenya Belt and Road cooperation and remarkable progress has been made.” Secretary Yatani said "the Chinese have undertaken and financed major road and rail projects that have eased transport of people and goods across the country." Officials in both countries are united in support of the infrastructure investments and continuing cooperation as it is viewed as mutually beneficial and a win-win arrangement for all parties.
The SGR is not the only BRI project in Kenya. China also played a key role in a solar power plant in Garissa by financing 90% of the $151 million price tag and supporting training and construction. The plant provides 50 megawatts and is the largest of its kind in East and Central Africa, as well as one of the largest in Africa. Contrary to other allegations made by the west, Kenyans were trained and employed both during construction and after completion rather than being fully outsourced to Chinese firms. The plant has been operational since late 2018 and powers roughly 70,000 households, or around 350,000 people - half of the population of Garissa. Similar to the benefits of the SGR growing intra-Kenya and intra-Africa trade, and thus lowering the reliance on foreign investments and imports, electricity access helps to forge the path ahead for a truly independent and self-reliant Kenyan nation, and African continent. With reliable access to home-produced energy rather than strictly relying on imports, the residents of Garissa, as well as their economy, have benefited.
Since 2013, the same year that the BRI initiative was launched, Kenya has increased from 2.3 million electricity connections to 8.2 million, growing access to electricity to 75% in the country from around 21%. The electricity that Kenya is providing its citizens is almost entirely renewable, with a whopping 93% of all Kenyan electricity coming from renewable sources. In contrast, as of 2020 only a meager 21% of the United States' energy was from renewable sources. Kenya has been able to massively expand their electricity access while remaining almost entirely renewable, a feat the rest of the world could surely learn from.
The Communist Party of Kenya released a statement on April 22, 2021 thanking the Communist Party of China for its role in supporting infrastructure and economic development:
"The CPC led China continues to play one of the significant deterrent roles against the predatory tendencies of the USA and its imperialist allies in their planned destruction of Cuba, North Korea, Iran, Syria, Venezuela and other countries that it regards as its enemies. CPK also recognises the contribution of China under the guidance of CPC in the economic and infrastructural development of Kenya and African countries."
As the CPK says, the People's Republic of China is deterring the worst excesses of predatory exploitation which might otherwise be expected from the imperialist west and its former colonial powers. One way that China is helping mitigate imperialism is by supporting infrastructure growth through the BRI, and ensuring that countries involved own the fruits of their labor themselves, while also not lending at destructive rates like western imperialist appendages such as the International Monetary Fund (IMF) and World Bank. Kenya has seen massive growth in electricity access, transportation, career opportunities, and economic capability thanks, in part, to China’s continued support.