China has fined Kenya Ksh1. 312 billion for defaulting on its loan.
The Chinese government said Kenya defaulted on payment of loans used to build the Standard Gauge Railway (SGR) in the financial year ending June 2021.
Documents released by Kenya’s National treasury revealed that the fine relates to the cost of default on interest at 1% of the due amount.
It was also learnt that the multi-billion project has increased the country’s debt crisis owing to its yearly costs of operation.
For instance, the project’s cost of operation stood at Ksh18.5billion against Ksh15 billion (profits) in the 2020-21 financial year.
It is also speculated that the country’s debt standing at Ksh8.6 trillion, will skyrocket after President William Ruto returned activities at the inland dry ports back to Mombasa.
