Implications of the China’s Belt and Road Initiative on Kenya’s Investment Projects and Debt Levels

The objective of this paper is to analyse the socioeconomic implications of Chinese Belt and
Road Initiative (BRI) which comes in the form of enhanced infrastructure development, loans
and foreign direct investment. This has led to China becoming the major lender of Kenya’s
development finance which is mostly lent in commercial rates hence leading to increased debt
stress to Kenya with potential for defaulting in the future. It has also led to a lot of infrastructure
development including the Standard Gauge Railway from the port of Mombasa to the City of
Nairobi among other infrastructure projects. Chinese presence in Kenya has also increased and
they are found not only in the energy, transport and infrastructure, agriculture and
manufacturing sector but also in the retail sector with the potential of displacing the small-scale
local retail traders. Most Chinese projects have also led to deforestation and environmental
degradation, and they also do not have any regard to employment and labour laws leading to
unease relations between the Chinese and the locals. It is therefore important for the Kenya
government to rethink its strategy with the Chinese government regarding debt restructuring,
diversifying its sources of development finance and emphasizing the compliance of international
environmental and labour laws.
Keywords: Kenya, China, exports, imports, trade balance, BRI, Infrastructure, Debt, FDI,
Socioeconomic