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Kenya

Feature | Debts

Financing: Why African countries want to convert debt into yuan

Kenya wants to convert part of its US dollar debt into Chinese yuan. Other African countries could also turn away from the US dollar in their debt policy. US President Donald Trump's policies are reinforcing the trend.

By Julian Hilgers

Kenya, officially the Republic of Kenya, is located on the east coast of Africa. The political situation in Kenya is characterized by ethnic diversity, historical tensions, economic challenges and social unrest. Since independence in 1963, the country has developed politically, but challenges remain in promoting democracy, respecting human rights and tackling structural problems, and former Vice President William Ruto was elected President in 2022. He only narrowly won against his challenger Raila Odinga, who has not yet conceded defeat. Conflicts between the opposition and Kenya's current government are increasing. They blame the government for the rapidly rising cost of living and demand Ruto's resignation. Food and energy prices have risen, the currency has fallen and Kenya is suffering the consequences of the drought. Economy in Kenya With a population of 50 million and average annual economic growth of over five percent, Kenya is a driving force in the region. Although Kenya is the largest economy in East Africa, half of the population lives below the poverty line. Economic growth has been severely impacted by the coronavirus pandemic, the war in Ukraine, severe droughts and global inflation. The latter has led to a rapid rise in food prices. According to the International Monetary Fund (IMF), the inflation rate in Kenya in 2022 was 7.6% and rising. Staple foods such as maize, wheat flour and cooking oil have doubled – a consequence of export shortages caused by the war in Ukraine. Politics in Kenya Politics in Kenya is characterized by ethnic diversity, historical tensions, economic challenges and social unrest. In 1963, the former British colony declared its independence and itself a republic. Due to Kenya's colonial past, British common law has a great influence, so that many legal acts are based on British models. Between 1978 and 1982, Kenya was governed by a one-party system, which was abolished at the insistence of foreign aid workers. Ten years later, the first free elections were held. The most important parties in Kenya are: William Ruto (UDA) has been Prime Minister of Kenya since 2022. Before that, Uhuru Kenyatta (JP) was president. The controversial election campaign between William Ruto and Raila Odinga (ODM) has divided Kenyan society. Odinga had already run in the last elections, lost and called the elections into question. The Kenyan population saw politics in the hands of the elite, who only wanted to secure their power. Many saw the massive support for Raila Odinga from his former rival Uhuru Kenyatta in the 2022 election campaign as an example of this. The voter turnout in Kenya that year was only 64%.Raila Odinga wanted to force Uhuru Kenyatta out of office with mass protests. He is now trying to do the same with William Ruto. In fact, the current political situation in Kenya is characterized by violent demonstrations. Not only the self-serving agenda of the opposition, but also the suffering of the population are the reason and catalyst for the riots. Kenyans are also suffering from poverty and hunger as a result of the commodity crisis, price increases and the currency crisis. Kenya is not spared from corruption either, which extends from ordinary civil servants to the highest levels. According to the Corruption Perceptions Index, Kenya scored 30 points in 2022, ranking 123rd out of a total of 180. Nepotism in the public service, inconsistent legal protection, bribery, unfair access to information on public affairs or government activities and laws, and potential conflicts of interest at government level are just some of the corruption allegations faced by the people of Kenya. Which international organizations is Kenya a member of? What international agreements and bilateral treaties has Kenya signed? International treaties and agreements signed by Kenya: