Kenya's Yuan-Denominated Debt Soars as Country Seeks Alternatives to Dollar-Linked Financing

The share of Kenya's foreign loans in yuan has more than doubled to 11.7 percent after converting three standard gauge railway (SGR) dollar-denominated loans to the Chinese currency.

Treasury data shows that the value of yuan-denominated external debt jumped 142.4 percent to Sh665.15 billion in the year to June, growing its share from five percent a year earlier.

The US dollar remained the main currency for Kenya's external debt at 54.8 percent or Sh3.1 trillion, but its share dropped from 59.8 percent in June 2025 following the swaps to yuan.

Kenyan officials linked the currency switch to the fact that the nation's debt is concentrated in dollars, exposing the government to higher currency and interest rate risks.