PREVIEW
The President seeks to bolster the economy through new loans and trade deals with the UAE, while navigating diplomatic pressures and shifting alliances
President William Ruto has pinned his government’s economic hopes on new loans and trade with the United Arab Emirates, as he seeks alternatives to Chinese financing.
Last week, Ruto cancelled a press conference in Nairobi organised by the Rapid Support Forces (RSF), the Sudanese militia led by General Mohamed Hamdan Dagalo ‘Hemeti’, following diplomatic pressure from the United States (AC Vol 66 No 2, Washington’s sanctions block Hemeti’s war message). Hemeti’s main supporter is Abu Dhabi.
The US sanctioned Hemeti and seven UAE-based companies for supplying cash and weapons to the RSF. Despite aligning with Washington on the RSF, Ruto’s standing with the UAE remains unaffected.
On the same day, Ruto was in Abu Dhabi signing a trade deal expected to substantially boost agricultural exports to the Emirati state. The deal also aims to open up services markets in finance and technology. It was one of three free trade pacts signed by the UAE.
More than trade, Ruto is hoping to finalise a US$1.5 billion loan with the UAE, as well as financing to extend the Standard Gauge Railway (SGR) which currently connects Nairobi to Mombasa.
Kenya had wanted the SGR project, which was financed by loans totalling 476bn shillings ($3.6bn) from China’s Exim Bank, to extend to Uganda and South Sudan. However, the completed track only reaches Naivasha, an agricultural hub in the Rift Valley, close to 500 kilometres from the Ugandan border.
The Kenya Railway Authority is one of the most financially precarious among the country’s parastatals. Despite regularly running services at or near full capacity since its launch in June 2017, the Mombasa-Nairobi line remains loss-making (AC Vol 64 No 7, Ruto gets the freight train blues). The terms and secrecy of the SGR contract with China have faced significant criticism in Kenya.
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