Kenya has been fined Kshs 1.312 billion in the financial year ending June for defaulting on a Chinese loan that was used in the construction of the Standard Gauge Railway.
Kenya failed to pay the loans from Chinese banks over struggles with the mounting public debt according to a local daily.
The Export and Import bank of China and other Chinese lenders offered Kenya over half a trillion to fund the construction of SGR from Mombasa to Naivasha.
“This (Sh1.312 billion) relates to the cost of default on interest at one percent of the due amount,” a report from the treasury revealed.
The burden of repaying the SGR loans has been bestowed on taxpayers since revenues collected from cargo and passenger services are not enough to meet the operations costs which stood at Kshs18.5 billion in June against sales that were Kshs15 billion.
The fine comes just a few weeks after President William Ruto pleaded with international lenders to give loan reliefs to African countries especially those that were hit worst by the covid pandemic.
“I join other leaders in calling upon the World Bank, the International Monetary Fund, and other multilateral lenders to extend pandemic-related debt relief to the worst-hit countries, especially those affected by the devastating combination of conflict, climate change, and covid-19,” Ruto said during the United Nations General Assembly last month