Kenya on Wednesday announced a sharp increase in passenger fares on the Chinese-built Standard Gauge Railway as the country struggles to repay loans owed to Beijing and others along with higher fuel prices.
State-owned Kenya Railways said in a statement that the 290-mile journey between the port of Mombasa and the capital, Nairobi, will cost about $30 in first class, down from $19, and $10 in economy, down from $6.
Kenya Railways cited the global increase in fuel prices: “This increase is due to changes in the energy and petroleum sector, where fuel prices have increased significantly, thereby affecting our cost of operations.”
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Wednesday’s announcement came days after Kenya’s central bank governor, Kamau Thugge, said the Kenyan shilling had for years been overvalued by 25 percent, which “led the country to maintain an artificially strong exchange rate.”
Two weeks ago, President William Ruto was in China where he sought a $1 billion loan to complete stalled infrastructure projects, despite Kenya’s total $70 billion in debt.
The flag of Kenya waves against a cloudy sky at Uhuru Park in Nairobi, May 1, 2018. (Photo by YASUYOSHI CHIBA/AFP via Getty Images)
The new train fares come into force on 1 January 2024.
The changes will also affect the popular commuter rail service in the capital, Nairobi, as well as the Kisumu and Nanyuki safari trains that attract thousands of tourists each year.
The Standard Gauge Railway, or SGR, which cost $4.7 billion borrowed from Chinese banks, began operations in 2017 but has struggled with low uptake of its freight services.
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“Kenya’s SGR desperately needs cross-border expansion to become an economically viable project,” economist Aly-Khan Satchu told The Associated Press.
“The SGR, as it stands, is stupid. To be viable, it needs to connect Uganda’s oil to the (Congo) sea and minerals,” Satchu added.
Kenya is grappling with mounting public debt that has led Ruto to announce tough austerity measures, including restrictions on foreign travel and cutting all government ministry budgets by more than 10 percent.
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But Ruto has faced criticism from Kenyans over his own trips abroad, with 38 trips since his inauguration in September 2022. That’s more than any of his four predecessors in their first year in office.
