Kenya struggles with the growing public debt were brought to light when it failed to make payments on the Chinese loans given for the construction of the standard gauge railway (SGR).According to Treasury documents obtained by Business Daily, Kenya was fined Sh1.312 billion by Chinese banks for loan defaults in the fiscal year that ended in June.To finance the construction of the SGR from Mombasa to Naivasha, Kenya accessed more than 500 billion shillings from Chinese lenders, led by the Export-Import Bank of China.Due to insufficient revenues from the passenger and cargo services offered on the track—which totaled Sh18.5 billion in the fiscal year ending in June against sales of Sh15 billion—taxpayers have been forced to bear the cost of the SGR loans.According to the disclosure documents obtained by the Business Daily, “This (Sh1.312 billion) relates to the cost of default on interest at one percent of the due amount.”In the year ending in June, SGR reported an operation loss of Sh3.4 billion and wired Sh22.7 billion in loan repayments.
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