)
)
Kenya is looking to deepen its diplomatic and development ties with China through a series of strategic engagements aimed at bolstering infrastructure, industrialisation, and economic transformation
As the geopolitical environment continues to evolve, Kenya is adopting an opportunity-based diplomatic approach that prioritises delivery over ideology.
Upcoming Cooperation and Risk Mitigation
President William Ruto’s upcoming state visit to China is expected to formalise new agreements across several sectors, including the Blue Economy, artificial intelligence, digital economy governance, cybersecurity, and vocational education.
)
)
)
)
The partnership also includes steps to reduce political risks and avoid relying too much on any one country.
The recent drastic changes in geopolitics and trade agreements have pushed many countries, including Kenya, to seek alternative partnerships and diversification strategies.
The government is also aiming to balance its global partnerships by working with the U.S. on trade agreements, exploring opportunities in European markets, and supporting free trade across Africa through the African Continental Free Trade Area (AfCFTA).
Infrastructure Development and Concessional Financing
China has had a significant role in Kenya’s infrastructure landscape. The 2024 FOCAC summit saw President William Ruto secure Sh40 billion in concessional financing to complete 15 stalled infrastructure projects across ten counties.
These included roadworks, energy transmission, ICT connectivity, and water infrastructure.
One of the key projects under this cooperation is the extension of the Standard Gauge Railway (SGR) from Naivasha to Malaba.
Other infrastructure collaborations include the Talanta Sports City, a multifunctional hub co-developed with Chinese partners, as well as rural road upgrades, dam construction, and urban transport enhancements such as Nairobi’s Intelligent Transport System.
)
Industrial and Trade Cooperation
While China remain among Kenya’s top trading partners, the trade balance is heavily weighted in China’s favour, with Kenya exporting primarily raw products like tea, leather, sisal fibre, and fish.
To address this, Kenya is seeking to boost local processing and manufacturing, targeting value chain development in sectors such as leather and textiles.
The government is engaging Chinese investors to establish operations within Kenya’s Special Economic Zones, offering incentives tied to technology transfer, job creation, and local capacity building.
This initiative seeks to increase the manufacturing sector’s contribution to GDP from 7.6% to over 20% by 2030.
Currency Diversification and Debt Management
Kenya also hopes to mitigate debt-related risks, particularly those stemming from reliance on U.S. dollar-denominated loans.
)
The National Treasury is pursuing Renminbi (RMB)-denominated financing from institutions like China Eximbank to reduce exposure to currency volatility.
By deepening ties with China, Kenya aims to secure critical investments in infrastructure, industrialisation, and trade while balancing its partnerships with global powers like the U.S. and Europe.