By Derek Mutiso
Kenya’s Pursuit of Balance in a Polarized Global Economy
On Monday, November 4th 2024, top Chinese official Li Xi arrived in Nairobi for high-level bilateral talks with Kenyan President William Ruto. Both leaders pledged to enhance collaboration in trade and development projects. China has been a key partner in financing large-scale infrastructure projects such as the Standard Gauge Railway, the Mombasa-Malindi highway and other critical developments.
“Kenya is committed to promoting this partnership across Africa and upholding the ‘One China’ policy,” Ruto affirmed during discussions at Nairobi’s State House. A noteworthy outcome of the talks was President Ruto’s request for China’s support in Kenya’s bid to join BRICS, a coalition of the world’s largest emerging economies.
Kenya, is now ramping up efforts to join the bloc as it seeks to diversify its financial and trade partnerships.
This comes amid growing frustration among African leaders over traditional financial alliances, particularly with institutions like the International Monetary Fund (IMF), and the World Bank. Many African nations, feel sidelined in decision-making processes that directly affect their economies. Joining BRICS would grant Kenya access to alternative financial resources and provide a platform to push for greater representation of the Global South in global governance structures.
Kenya’s Frustrations with the IMF: Debt Strain and Representation Challenges
Across Africa, nations grapple with debt burdens, rising food and fuel prices, and public dissatisfaction with IMF-backed reforms. In Kenya, this discontent has been amplified by the country’s mounting $82 billion debt, a significant portion of which stems from high-interest loans provided by the IMF and World Bank. The share of loans from these Bretton Woods institutions has surged, now constituting 43.3% of Kenya’s external debt, up from 21.8% in 2019, according to Treasury data. This growth has tightened the institutions’ grip on Kenya’s economic policies, resulting in controversial directives such as tax hikes, public sector reforms, and cutbacks on non-essential hiring—all of which have sparked protests and widespread public backlash.
Kenya’s reliance on multilateral debt has grown as Chinese financing—a previous cornerstone of its infrastructure boom—has declined. Outstanding loans from China have fallen by KSh 218.17 billion to KSh 736.19 billion due to repayment of earlier debts and reduced lending from Beijing. In contrast, multilateral debt now accounts for 53.9% of Kenya’s external obligations as of FY2023/24.
Despite this shift, many African leaders, including those in Kenya, remain critical of the Bretton Woods system. While the IMF recently added an African seat to its board to enhance representation, Africa’s 54 countries still hold a mere 6.5% voting power despite hosting 18% of the global population. Sub-Saharan Africa, which accounts for the largest share of IMF lending programs, has little sway in shaping policies dominated by powerful members such as the U.S., which wields 16.5% of voting power. Kenyan leaders have called for reforms to ensure that IMF voting reflects liquidity needs and balance-of-payment considerations rather than just economic size.
This dissatisfaction with Western-led financial institutions has driven Kenya to explore alternatives, such as joining BRICS. Membership in BRICS offers a host of potential benefits though, including access to loans through the New Development Bank (NDB) with fewer conditions and the possibility of trading in local currencies to shield economies from dollar volatility. As Kenya’s debt servicing burden grows—standing at 68.3% of ordinary revenue in FY2022/23—such an alternative could provide much-needed economic sovereignty and reduce reliance on stringent IMF requirements.
The pursuit of BRICS membership also aligns with Kenya’s broader efforts to recalibrate its financial alliances. With China scaling back its lending, Kenya’s engagement with BRICS could not only fill this void but also help navigate a global financial system increasingly characterized by polarization between Western and non-Western powers. For Kenya, joining BRICS represents a strategic pivot, offering a potential escape from the heavy-handed influence of traditional lenders while positioning the country as a key player in the Global South’s push for more equitable economic governance.
Economic experts have long advocated for Kenya to join the bloc. In a 2023 article, Peter Kagwanja, Chief Executive of Africa Policy Institute wrote: “Kenya cannot ignore the BRICS. Its own development is inextricably tied to the bloc. Moreover, the expansion of new members has greatly increased the global clout of BRICS.”
Kwagwanja stated, “Kenya’s foreign policy managers must take to heart the idea that BRICS is the future of the world’s economic – if not military – power. The report, by the professional services giant PwC titled “The long view: how will the global economic order change by 2050?” looks at which economies around the world will be the biggest and most powerful economies by 2050.”
“In the next 27 years, our planet’s economic and financial landscape will have changed so drastically from what we know now that only America will qualify as a member of the world’s Seven largest economies, popularly known as ‘the G7’.” Noted Kwagwanja
A Growing Alliance: BRICS and New Membership
Founded initially as BRIC in 2009, BRICS has grown to include Brazil, Russia, India, China, and South Africa. This year, new members—including Ethiopia, Egypt, Iran, and the UAE—joined the bloc, signaling a trend of emerging and developing nations aligning to counterbalance Western influence. Together, the BRICS members Represent 45% of the world’s population and 28% of the global economy, BRICS has significant influence over resources like crude oil, and its members contribute 44% to global production. Kenya’s interest in BRICS is part of a broader strategy among developing nations seeking greater agency in economic and political spheres.
The West, U.S. Ties, and Strategic Neutrality
Kenya’s BRICS bid may introduce complexities in its Western alliances, especially with the United States, which recently designated Kenya a “major non-NATO ally.” Kenya’s trade relationship with the U.S. under the African Growth and Opportunity Act (AGOA) is crucial, providing duty-free market access. However, as Kenya’s alliances shift, future U.S. trade policies could be impacted, particularly if the U.S. adopts a more isolationist stance.
The recent U.S. election saw Donald Trump returning to power, a result that has already stirred some markets globally. In Africa, the Kenyan shilling remained stable at around 129 to the dollar following Trump’s victory, but other currencies, such as South Africa’s rand, saw notable volatility. The ripple effects of this change in U.S. leadership could reshape policies, and impact Kenya. Given Trump’s pledge to impose substantial tariffs on Chinese imports to the United States, it is likely that the US-China bilateral relationship will become even more contentious with another Trump presidency.
On the other hand, BRICS membership could also allow Kenya to balance relations with both Eastern and Western powers, leveraging alliances to negotiate favorable terms with the West.
Vin Weber is a former US representative from Minnesota and a former advisor to several Republican campaigns for president. He believes that There is already ample evidence that the US-China rivalry will intensify on the African continent, especially when it comes to the United States’ increasing focus on critical minerals and their supply chains.
However, Weber also believes that there is no reason Trump would seek to weaken the AGOA act. “As it approaches its twenty-fifth anniversary, the legislation—up for reauthorization in 2025—is finding broader and deeper support in the business communities on both continents.”
Weber feels that the president will feel compelled to encourage such economic interaction to counter the massive presence of China on the continent.
Intra-BRICS Trade and Kenya’s Vision for African Unity
Kenya’s BRICS membership could amplify its role in promoting intra-Africa trade, a pillar of the African Continental Free Trade Area (AfCFTA). By strengthening trade ties with fellow African BRICS members like Ethiopia, Egypt, and South Africa, Kenya would contribute to regional economic integration and lessen dependency on the U.S. dollar. Increased use of local currencies among BRICS countries would support Kenya’s goal of establishing a more united African front in global trade.
Prestige, Influence, and a New Global Role
BRICS membership could also give Kenya a more substantial voice on the global stage, where African nations have historically had limited influence. Kenya would gain a platform to advocate for policies better aligned with African interests, ranging from debt restructuring to climate financing. With the IMF’s recent addition of an African board seat seen as insufficient by some experts, BRICS presents Kenya with a compelling alternative for international influence.
Kenya’s interest in joining BRICS highlights its broader effort to diversify economic partnerships and explore alternatives to traditional financial institutions. The bloc’s appeal lies in its potential to provide less restrictive financing options and a platform for advocating for greater representation of developing nations in global governance. However, this pivot comes with complexities, particularly in balancing longstanding relationships with Western allies like the United States.
While BRICS membership could open new avenues for trade and financial collaboration, it also demands careful navigation to safeguard Kenya’s interests in an increasingly polarized global economic landscape. Kenya’s strategy will require pragmatism, leveraging both its existing alliances and new opportunities to advance its economic sovereignty and regional leadership.
Ultimately, the success of this endeavor will depend on Kenya’s ability to balance competing interests while nurturing sustainable growth and maintaining its role as a key player on the African stage.
The author is a business writer and Project Coordinator, Omeriye Foundation
