Return of the red dragon: Kenya forced to face East amid looming Western aid cuts

As the United States, Germany, the United Kingdom and the rest of Europe signal a pullback in foreign aid, Kenya is increasingly looking to China for support.

This shift suggests a potential realignment in Kenya’s diplomatic and economic strategies, experts say.

Kenya has been a strong ally of the US as well as China under successive administrations, although President William Ruto is seen as leaning more to the West, having entered into several bilateral agreements with the previous Joe Biden administration, which are now at risk following the return of Donald Trump to the White House last year. 

Recent announcements from Washington, Berlin, Amsterdam and London citing budgetary constraints and a reassessment of their aid priorities have raised concerns among Kenyan officials who depend on Western funding.

For instance, the United States and Germany have significantly reduced their development assistance, with more cuts planned. Similarly, the UK has announced intentions to decrease its aid budget to fund increased defence spending.

David Miliband, head of the International Rescue Committee, reacted to the UK’s decision, calling it “a blow to Britain’s proud reputation as a global humanitarian and development leader.”

In the US, termination notices have been sent to numerous aid projects, including those in Kenya, as the new Trump administration reviews its foreign assistance to align with his “America First” agenda. 

“Over 34,000 people have lost their jobs due to the USAID freeze on aid,” noted international relations researcher Dr Calvins Adhere, highlighting the cuts’ impact. 

Alarm is also rising over Washington’s potential withdrawal from global institutions, including the International Monetary Fund and the World Bank, with the no-show of US Treasury Secretary Scott Bessent at G20 meetings held recently in South Africa adding to the anxiety. 

Kenya has relied on the two global lenders for billions of shillings of loans, where, as a founder member, the United States holds the largest single share of each institution - just over 16 per cent for the IMF and just under that for the World Bank.

Earlier, President Trump signed an executive order announcing his intention to withdraw the US from the World Health Organisation (WHO).

Today, he is expected to enumerate more of his “America First” foreign policy plan when he delivers his first address to a joint session of the US Congress since his re-election.

And now, as Western aid diminishes and America retreats from the global space, experts suggest that China is poised to become a more crucial development partner for Kenya and other African nations. 

Analysts suggest that Kenya should adopt a pragmatic approach to securing its economic future, particularly as the US, UK, and Germany reassess their global roles and the country pivots further towards China.

Kenyans will soon learn of China’s commitments to Kenya and other countries in Africa as the world’s second largest economy holds its anticipated Two Sessions, an annual event held in Beijing where legislative and policy priorities are set.

The China’s National People’s Congress - the highest organ of state power of China - will begin its annual meeting on March 5, giving Chinese leaders a chance to set the economic direction and lay out spending plans for the year ahead.

During the upcoming meeting, Dr Cavince Adhere, an international relations specialist, said China will likely announce a strategic focus on expanding its influence in African countries such as Kenya at a time when Western powers are grappling with domestic issues, including political polarization and economic uncertainty, leading to a more inward approach to foreign aid.

“China is acutely aware of the reorganizations occurring in the US and the EU,” he said in an interview, pointing out that for countries like Kenya, “the stability in the relationship is certain; it’s long-term, grounded, and has endured for years.” 

Professor Macharia Munene, a history professor at the United States International University (USIU), told Financial Standard that while China “might want to project itself as a reliable partner to developing countries,” it is “unlikely to take the extra burden of replacing either US or UK initiatives.”

He reckons that China, having positioned itself as a major economic player in Kenya and Africa, is expected to assert itself further on the global stage as Western powers turn inward.  

“China might want to project itself as a reliable partner to developing countries in the areas of development and poverty alleviation,” he said in a telephone interview.  

“Although it [China] probably will maintain its current commitments, it is unlikely to take the extra burden of replacing either the US or the UK activities.” 

According to China International Press Communication Center (CIPCC) Director Yu Lei, China will, during the upcoming meetings, double down on its commitments to Kenya and other African countries as a “friend of the continent.

Analysts say China’s role is set to grow as a vital development partner for Kenya and other African nations amid the reduction of traditional Western aid. 

Dr Adhere pointed to the growing “inward-looking policy stance” in the West, with aid freezes and budget cuts creating a “very big void” for vulnerable African economies.  

He sees China as the remaining”biggest comprehensive development partner” for Kenya and other African countries, citing trade, education, construction, and financing. 

Dr Adhere referred to the recent Forum on China-Africa Cooperation, where agreements on infrastructure, youth training, and agricultural modernisation were established.

“Infrastructure is the single most important piece of the development agenda,” he stated, emphasising China’s potential role in addressing Africa’s infrastructure deficit, along with its capabilities in energy and agricultural development.

Kenya’s pursuit of Chinese support is evident in its ongoing efforts to secure funding for the Standard Gauge Railway (SGR) extension. Former Transport Cabinet Secretary Kipchumba Murkomen previously expressed appreciation for the Chinese government’s willingness to collaborate on extending the SGR from Naivasha to Malaba.

While some analysts raise concerns about debt sustainability, Kenyan leaders maintain that the benefits of Chinese investment outweigh the risks. 

Kenya sees China playing a significant role beyond infrastructure development, with cooperation expanding into areas like health, agriculture, and technology, a senior Kenyan diplomat said earlier.

Speaking recently on the sidelines of celebrations to mark the Chinese New Year at the United Nations Headquarters in Nairobi, the Deputy Director General at the Asia and the Pacific Directorate at the Kenyan State Department for Foreign Affairs Ambassador Jane Makori emphasised the deepening of the strategic partnership between east Africa’s largest economy and world’s second-largest economy after the United States.

“China and Kenya are strategic partners, and we do identify jointly areas of mutual interest and we then advance on them,” Ambassador Makori said.

“So depending on different sectors, once we jointly identify, then we strengthen that. It doesn’t only cover infrastructure, where we are a very important belt and road initiative partner in Africa, but in other areas. I think you have witnessed cooperation in health, ICT, education, and Agriculture, among other areas.” 

The newly appointed Ambassador of China to Kenya, Guo Haiyan, reiterated her commitment to strengthening ties with Kenya.

“I am ready to work closely with the Kenyan government and people, to deepen traditional friendship between the two countries, and further promote practical cooperation for the benefit of the two peoples,” Ambassador Haiyan said.

As China’s “Two Sessions” unfold, the world will watch how these shifts reshape the landscape of foreign aid and investment in Africa.

Foreign aid budgets are being slashed worldwide as Western governments—from Washington to Berlin—shift spending toward defence and domestic priorities.

Recently, Washington and European capitals have announced cuts to their aid packages, generating alarm among Kenyan officials about the future of development projects that heavily rely on Western funding. 

In Germany, one of the world’s largest foreign aid donors plans to cut aid were already in motion before the government collapsed and called snap elections.

The new administration by German President Frank-Walter Steinmeier is expected to prioritise defense, keeping aid cuts firmly on the table.

Germany had only recently drastically reduced its official development assistance, leading to a reduction of €1.7 billion (Sh228.3 billion) in the development budget and €430 million (Sh57.7 billion) in the humanitarian budget compared to 2022.  

A revised budget adopted by the German Parliament in January 2024 saw nearly €1 billion (Sh134.3 billion) cut from the foreign development budget and nearly €500 million (Sh67.1 billion) from humanitarian aid. 

In the UK, Prime Minister Keir Starmer recently announced plans to allocate three per cent of GDP to Defence by the next parliament, beginning in 2029, funded in part by reductions to the aid budget.  

This decision has shocked humanitarian charities, which warn that it could damage British influence abroad and severely impact those they support. 

The UK is currently the fifth-largest international aid donor, contributing over $19 billion (Sh2.46 trillion) in 2023, according to the Organisation for Economic Cooperation and Development (OECD), trailing only the United States, Germany, European Union institutions, and Japan.

Other governments across Europe are also cutting back. The Netherlands has slashed 30 per cent of its aid budget, redirecting funds to projects that “directly contribute to Dutch interests.” Belgium cut aid by 25 per cent while France reduced its budget by 37 per cent.  

US-funded projects worldwide, including those in Kenya, providing lifesaving assistance, received termination notices earlier, sending shockwaves through the global aid community.

These cancellations came as President Trump’s administration issued a review to ensure that grants align with his “America First” agenda, following a 90-day pause on all foreign aid initiated in January. 

Just weeks later, the Trump administration decided to terminate more than 90 per cent of US Agency for International Development (USAID) programmes, as indicated in a February 25 court document.

Major United Nations health initiatives, including UNAIDS, the Stop TB Partnership, and Scaling Up Nutrition, were among those receiving termination notices.

UNAIDS described the end of its relationship with USAID as a “serious development” affecting lifesaving services and has sought further clarification from the U.S. government. 

Last year, USAID allocated $149.4 million (Sh19.2 billion) to its Kenya programs, a decrease from $251.5 million (Sh32.4 billion) the previous year, according to a review of USAID filings. 

Dr Adhere said many development programmes are certainly facing headwinds from the withdrawal of US support for Kenya’s development. 

He suggested that China could help mitigate the impact of Western aid reductions through infrastructure development, asserting: “Infrastructure is the single most important piece of the development agenda. Without infrastructure, people and goods cannot move.”