Ruto visit: Inside fresh US plans to undercut Chinese influence in Kenya

Financial Standard
By Brian Ngugi | May 21, 2024
President Joe Biden, US First Lady Jill, Kenyan President William Ruto and First Lady Rachel at the White House, December 14, 2022. [White House]

President William Ruto kicks off his historic US tour at a time the Biden administration plans to step up its security and economic ties with East Africa's largest ally in the face of rising Chinese influence in the region.

President Biden and US First Lady Jill Biden will host President Ruto and First Lady Rachel Ruto on Thursday at the White House. 

The visit marks the 60th anniversary of US-Kenya diplomatic relations, according to the White House. It comes after the American president broke his promise to visit Africa last year.

Biden will hold a bilateral meeting with Ruto, and the pair will talk about “trade and investment, technological innovation, climate and clean energy, health, and security,” according to a release. A joint press conference and a state dinner will be held later that day.

“The visit will affirm our strategic partnership with Kenya and further the vision set forth at the US-Africa Leaders Summit: African leadership is essential to addressing global priorities,” read a release.

Biden has committed to a closer relationship with African countries as his administration stresses its global leadership, and the state visit may appear as an alternative outreach to an in-person trip.

The Standard has learned the United States plans to provide financial assistance in the form of affordable loans to Kenya to undercut Chinese influence.

This support aims to facilitate the development of large-scale infrastructure projects, including the construction of roads and highways in Kenya whose funding has previously been dominated by China.

The underlying objective of this strategic initiative is to diminish the Chinese influence in the region, albeit discreetly, experts say.

According to documents obtained by The Standard, the Biden administration is expressing concern over the ongoing close relationship between Kenya and other African leading economies and the Chinese government.

As a result, the administration is planning to exert its influence over the World Bank Group, where it holds significant sway as a major financier.

The aim is to secure funding for large-scale infrastructure projects currently being carried out in Kenya.

In a letter addressed to the Speaker of the United States House of Representatives, the White House earlier emphasised the need for American legislators to allocate additional funds to the World Bank, enabling it to provide financial support to Kenya and other emerging market countries.

Provide funding

These countries have become targets of China's efforts to win over their respective leaders.

"This request would provide $1.25 billion (Sh165 billion) in contributions to the International Bank for Reconstruction and Development (IBRD).

"Funding would be used for loan guarantees and a contribution to IBRD’s Multidonor Trust Fund for Innovative Global Public Goods Solutions," said the White House letter dated October 29 last year, to the Honorable Patrick McHenry Speaker of the US House of Representatives.

The Biden administration believes that providing more funding to the World Bank would allow for increased lending to Kenya, as well as other developing countries. 

This move is seen as a countermeasure to Beijing's efforts to maintain its influence in these regions through financing large-scale infrastructure projects.

"This request would leverage $25 billion of IBRD lending at below non-concessional rates to IBRD borrowing countries to respond to global challenges," said Shalanda D Young.

 "This funding would provide financing to help countries such as Colombia, Peru, Jordan, India, Indonesia, Morocco, Nigeria, Kenya, and Vietnam build new infrastructure and essential development projects such as supply chains, breaking reliance on the People’s Republic of China (PRC)."

The World Bank last November announced its intention to pursue a loan and investment agreement worth Sh1.8 trillion for Kenya over the next three years.

The Kenya Kwanza government will find economic relief in the package, which consists of conditional loans and guarantees worth hundreds of billions of shillings. 

 The White House official continues: "This request would mobilise tens of billions of dollars in additional finance from partner nations, allowing the World Bank to provide a credible alternative to PRC (People's Republic of China) financing."

The contents of the Biden letter underline his lingering fears about the rise of Beijing in emerging markets such as Kenya, underlining a Cold War era-like fresh push to maintain key allies and lockout China's rise.

It, however, comes as a huge boost for the cash-strapped Ruto government which is seeking billions of shillings from global partners to deliver on its ambitious development agenda that includes completion of new roads and railways.

The Chinese ambitions in Africa have raised concerns within the Biden administration, as they believe that the Asian nation's influence extends beyond the economic sphere.

For instance, Kenya, a critical US ally in the East Africa region, has for decades been under pressure from Washington to resist the push for stronger military and economic ties with China, which has been seeking greater influence in the region.

“The PRC probably also has considered other countries as locations for PLA military logistics facilities, including Burma, Thailand, Indonesia, Pakistan, Sri Lanka, United Arab Emirates, Kenya, Equatorial Guinea, Seychelles, Tanzania, Angola, Nigeria, Namibia, Mozambique, Bangladesh, Papua New Guinea, Solomon Islands, and Tajikistan,” said the US Department of Defence in a recent annual report to the US Congress.

Infrastructure projects

As part of President Xi Jinping's Belt and Road Initiative (BRI), Chinese institutions have provided Kenya and other African countries with loans amounting to hundreds of billions of dollars.

This initiative aims to finance the majority of infrastructure projects in developing nations.

Kenya, for instance, signalled recently it is seeking to secure a deal with China for the extension of the Standard Gauge Railway (SGR) towards the hinterland in Malaba, near the Uganda border.

Beijing has been keen to dislodge Kenya’s allies again in bagging crucial deals including the construction of a new $1 billion toll highway from Nairobi to the Rift Valley hinterland.

Such deals would benefit Chinese firms such as China Road and Bridge Corporation which built a section of Kenya’s SGR but also the Nairobi Expressway toll highway on a public-private partnership basis.

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