Polished Talk, Zero Execution - Vietnam Gas President Slams Kenya

Hello Moneymakers, Washington here. In today’s newsletter, we are covering Vietnam’s gas president's remarks on Kenyan leaders being big on talk with zero output. We also break down some of the infrastructure projects to be funded by China and look, in detail, at the Kenyans being targeted for the social housing projects.

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Polished Talk, Zero Output - Vietnam Gas President Slams Kenya

Vietnam Gas President Doanh Chau has accused Africa of lacking a long-term vision for development, following a meeting with Kenyan President William Ruto and Prime Cabinet Secretary Musalia Mudavadi.

In a statement issued a week ago after the meeting, Chau remarked that Kenya, in particular, does not suffer from a lack of money or talent but rather from leadership focused on short-term gains.

"I met with Prime Cabinet Secretary Musalia Mudavadi and President William Ruto in Nairobi. They spoke energetically about Kenya’s future—investment, infrastructure, and public housing. But behind the polished language was a painful truth: there is no serious execution culture," he observed.

"Kenya’s real problem is not a lack of money or talent. It’s the absence of long-term vision and the dominance of short-term gain. Leaders talk big, but systems don’t move. They wait for outsiders to bring business, rather than build an environment for it."

Thorny Issue: Chau identified electricity supply as a major obstacle to investment, noting that Kenya's 4-gigawatt capacity is insufficient for a population of 50 million. In contrast, Vietnam, with a population of 100 million, enjoys a 70-gigawatt capacity.

"In Kenya, the basic energy supply is unstable. Yet, the government built a fancy expressway from Nairobi to Mombasa—without an export industry to support it. Meanwhile, millions live in slums and huts, with no access to reliable utilities," he added.

For complete coverage of this story, visit money254.co.ke.

‍Mega Projects Funded by China 

The Kenya Kwanza administration has secured funding from China for five infrastructural projects, including the extension of the Standard Gauge Railway (SGR).

In a statement on Thursday, April 24, State House announced that China had agreed to fund the extension of the SGR from Naivasha to Malaba in addition to dualing the Nairobi-Nakuru-Mau Summit–Malaba Highway.

Other projects earmarked for development include the construction of the Kiambu-Northern Bypass, the Eldoret Bypass, and the Nithi Bridge.

‍Why It Matters: China is one of the biggest external lenders for Kenya and has funded several projects, such as the Mombasa-Nairobi SGR and the Nairobi Expressway. More funding is set to increase Kenya’s debt amid concerns about the country’s debt sustainability. Latest data by the Treasury (September 2024) shows that Kenya owes China over Ksh690 billion.

According to the government, the projects will be carried out under the Public-Private Partnerships. This move will see the Chinese companies undertake the projects using their resources and recoup their investments by operating the projects for a period of time, as was the Nairobi Expressway deal.

In this case, the companies could leverage the tolling of the Nairobi-Nakuru Highway to recoup the money.

“This cooperation cements Kenya’s role as a key Belt and Road Initiative (BRI) and regional logistics partner, while integrating East Africa’s transportation network and enhancing intra-regional trade,” read the statement in part.

“Additionally, China has opened the door for increased private sector investment, which will be channelled into these infrastructure projects through Public-Private Partnerships, further accelerating development and deepening economic ties.”

‍Govt Targets Kenyans Earning Less Than Ksh20K With Social Housing

Kenyan families with a monthly income below Ksh20,000 will benefit from the Affordable Housing Program through the social housing projects, Boma Yangu, which manages the project, has announced.

The social housing projects will consist of 3 house types, including one, two, and three-room houses.

For instance, 1-room houses will measure 20 square meters and are priced at Ksh640,000.

2-room houses (measuring 28 square meters) are priced at Ksh960,000, while 3-room houses (measuring Ksh30 square meters) will be sold at Ksh1,280,000.

However, the prices could be reviewed depending on market factors such as construction costs.

What Boma Yangu is saying: “We are happy to announce the launch of the sale of affordable housing units, reaffirming our commitment to providing quality homes for all Kenyans.”

“Please note that the prices currently displayed on this platform are provisional and are being reviewed to align with the updated rates. We remain committed to delivering affordable housing to all Kenyans.”

‍Kenya to Receive Ksh64 Billion UAE Loan 

Kenya is set to receive a Ksh64 billion loan from the United Arab Emirates in the coming days.

According to Treasury Cabinet Secretary John Mbadi, who spoke to the Business Daily, the funding is part of the Ksh174 billion loan facility negotiated by President William Ruto’s administration in 2024.

‍Why This Matters: Over the past month, Kenya has been racing against time to land a loan to finance part of its projects after the government cancelled a 4-year Ksh466 deal with the IMF to renegotiate its engagement terms. Treasury CS John Mbadi has held meetings in the US while Ruto signed multi-billion-shilling deals in China.

Mbadi added that the government had opted to receive part of the loan this year, with an option of pushing the remainder of the loan facility to the next financial year.

"The maximum we may take this financial year is USD1 billion, but we are starting with USD500 million. If there's still pressure in meeting all our external financing, we can go for the USD1 billion," the CS said.

Also Read: Ruto's 4-Point Agenda in China, Kenyans to Spend More on 4 Food Items

‍Govt Asked to Review 2.75 SHA Deductions

Experts have called on the government to review its strategy of implementing the Social Health Authority (SHA) through the 2.75 per cent salary deductions.

As reported by the People Daily, the model was unsustainable as the contributions were mostly being made by Kenyans employed in the formal sector. 

Alternatively, the experts are seeking to have the government use VAT to fund SHA, given that Kenyans in both the formal and informal sectors pay for VAT through the purchase of various household items and fuel.

‍Sell Safaricom Shares Instead of Borrowing - Nyoro to Govt

Former National Assembly Budget chair Ndindi Nyoro has called on the government to leverage its assets to finance projects instead of taking more loans.

‍Citizen Digital reported that the MP proposed the sale of some of its Safaricom shares to the private sector.

“For example, government assets in Safaricom are or going to more than Ksh300 billion, and it was more before. If we value an asset like Safaricom very well, the government can easily get the money that we are borrowing externally by selling just a portion of Safaricom as an institution,” he stated.

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Graphic of the day: Top NSE Gainers and losers

Also Read: SGR Extension to Kisumu Tops President Ruto’s Agenda in China