SGR [Photo: NMG]
China has fined Kenya Sh1.31bn for defaulting on SGR loans. This is in relation to the chinese Loan provided to build the SGR.
According to the Treasury the Chinese banks fined Kenya Sh1.312 billion in the year ended JUNE 2022 for loan defaults,
Kenya defaulted on repayment of the Chinese loans provided to build the standard gauge railway (SGR), highlighting the country’s struggles with the mounting public debt.
Taxpayers have been forced to shoulder the burden of the SGR loans because revenues generated from the passenger and cargo services on the track are not enough to meet the operation costs, which stood at Sh18.5 billion in the year to June against sales of Sh15 billion.
“SGR posted an operation loss of Ksh3.4 billion ($28 million), and wired Ksh22.7 billion ($187.6 million) in loan repayments in the year to June”.
Kenya tapped over half a trillion shillings from Chinese lenders, led by the export -import bank of china to fund the construction of the SGR from Mombasa to Naivasha.