China fines Kenya Ksh1.3B for defaulting on SGR loans

By , K24 Digital
On Thu, 13 Oct, 2022 12:20 | 2 mins read
SGR train. PHOTO/Courtesy

The country will be experiencing an additional weight of ballooning debts after the Chinese government fined it Ksh1. 312 billion, documents by the National treasury have revealed, as reported by Business Daily.

The latest comes after Kenya failed to honour the agreement to settle the loans used to build the Standard Gauge Railway (SGR) in the financial year ending June 2021.

"This Ksh1.312 billion relates to the cost of default on interest at 1% of the due amount," the documents stated.

The multi-billion project has increased the country's debt crisis owing to its yearly costs of operation.

For instance, the project's cost of operation stood at Ksh18.5billion against Ksh15 billion (profits) in the 2020-21 financial year.

SGR. PHOTO/Courtesy

Surge in business at SGR

With the country's debt standing at Ksh8.6 trillion, the amount is set to skyrocket after President William Ruto returned activities at the inland dry ports back to Mombasa.

Speaking during his inauguration ceremony at the Kasarani stadium on Tuesday, September 13, 2022, the Head of State affirmed that the cargo services will return to the county as a fulfilment of the pledges he made to the people during his campaigns.

“I will be issuing instructions for clearing of goods and other attendant operational issues to revert to Mombasa Port as I made a commitment to Kenyans. This will restore thousands of jobs in the city of Mombasa,” Ruto stated.

At the time, various stakeholders welcomed the move as others such as Roy Mwanthi, chairman of the Kenya International Forwarding and Warehousing Association (Kifwa), decried a surge in business at the SGR.

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