Kenya pushes China to seal key pact ahead of new financial year

President William Ruto with his Chinese counterpart Xi Jinping at the Great Hall of the People in Beijing, China. April 24, 2025. [Courtesy, PCS] Kenya is pressing its largest bilateral creditor, China, to finalise a crucial financial cooperation agreement by the end of this month, which marks the start of a new financial year. During high-level bilateral talks in the southern Chinese city of Changsha with Chinese Foreign Affairs Minister Wang Yi, Kenya's Prime Cabinet Secretary and Foreign Affairs Musalia Mudavadi emphasised the importance of concluding negotiations on the financial cooperation agreement by the end of this month. Mr Mudavadi's visit and call for the swift implementation of a financial deal follow President William Ruto's state visit to Beijing in April, where he and Chinese President Xi Jinping outlined broad areas of cooperation, including trade and investment. "The government of Kenya is very happy with the outcomes of the [President Ruto's] visit, which has deepened and expanded the areas of cooperation. In particular, Kenya is deeply indebted for the support received on financial and trade cooperation matters," said Mr Mudavadi. "In this regard, the support of the Government of China towards the conclusion of the discussions on financial cooperation at the earliest, before the end of June 2025, is fundamentally important." This latest move by Kenya highlights the urgency Nairobi places on the financial deal and its growing dependence on Beijing, particularly as tensions with Washington escalate due to new trade tariffs imposed by the Trump administration. The call comes at a critical time when Kenya is set to unveil a new budget for the year starting July 1 and is under pressure to explore alternatives for economic support to fund various programmes amid strain on tax collections, looming debt repayments and economic headwinds. China currently holds over 60 per cent of Kenya's bilateral debt, with approximately 12 major infrastructure projects funded by Chinese investments. On Tuesday, the Prime CS, who was accompanied by China's Ambassador to Kenya Willy Bett and Jane Makori, the Deputy Director General at the Asia and the Pacific Directorate, expressed gratitude for China's support in financial and trade cooperation, underscoring the significance of Nairobi's renewed partnership with Beijing. Mr Mudavadi's visit serves as a crucial follow-up to President Ruto's earlier discussions, focused on accelerating and formalising previously agreed commitments. Although specific financial terms of the latest financial cooperation deal being pushed for by Kenya were not disclosed, such agreements typically involve concessional loans, infrastructure financing, and trade facilitation-key elements for Kenya's economic development ahead of the new financial year. Kenya's overall spending is set to increase to Sh4.34 trillion in the 2025-26 financial year from Sh3.95 trillion in the financial year ending this month. During President Ruto's Beijing visit, where he met President Xi, the leaders outlined broad cooperation areas spanning trade and investment, but also the building of new roads and railways. Key agreements from Ruto's trip included plans to extend the China-funded and built Nairobi-Naivasha Standard Gauge Railway (SGR) to Kisumu and eventually Malaba, as well as the dualing of the Nairobi-Mau Summit Road. Mr Mudavadi expressed appreciation for the elevation of Kenya-China relations during President Ruto's April state visit to China to a strategic partnership, noting the mutual benefits of a strong bilateral relationship between Beijing and Nairobi. He informed his Chinese counterpart, Mr Wang, that Kenya is consulting internally on the Economic Partnership Cooperation Framework earlier agreed on between the two countries and aims to be ready before the end of June. He stressed the importance of technical teams meeting to prepare for bilateral negotiations, which could lead to greater access for Kenyan goods and services in the Chinese market. "On the Economic Partnership Cooperation Framework, Kenya is consulting internally and should be ready before the end of June," said Mr Mudavadi. "Therefore, it is important for the technical teams to meet and begin preparations for bilateral negotiations, which will ultimately lead to more access to the Chinese market for Kenyan goods and services." The two nations, during the Ruto visit, also discussed direct air links, expected to significantly enhance trade and tourism. In addition to infrastructure, the discussions covered healthcare cooperation, with China pledging to support Kenyan enterprises in developing local healthcare industries.

Kenya pushes China to seal key pact ahead of new financial year

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Kenya pushes China to seal key pact ahead of new financial year

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