Kenya wants to broaden its development financing avenues, President William Ruto says as the African nation faces big debt repayments to China, adding "overreliance on one market is not good for any country."

Ruto spoke with Nikkei during a visit to Japan last week to meet with Prime Minister Fumio Kishida.

The two leaders signed a memorandum of understanding on Kenya issuing a samurai bond, a yen-denominated bond issued in Japan by a foreign company or government.

"We must continue diversifying our sources of development financing so that we avoid overreliance on one sector," Ruto said. "That’s why we are exploring other avenues like the samurai [bond]. We are looking at other avenues of development financing."

China accounted for 73% of the East African country’s bilateral debt in 2022, Kenyan government data shows. Borrowing from China has accumulated with projects like a railway between Nairobi and the port city of Mombasa that was funded by a multibillion-dollar loan.

With passenger traffic not growing as expected, some observers have said Kenya risks falling into a Chinese debt trap in which it loses control of infrastructure rights. Officials from both countries have downplayed such fears.

Kenya’s total debt nearly doubled from 2018 to around 8 trillion Kenyan shillings ($50 billion at current rates) in 2022, or roughly 70% of gross domestic product, with infrastructure projects started under the previous administration and COVID-19 stimulus measures putting pressure on public finances. The International Monetary Fund in 2020 assessed the country’s risk of debt distress as high.

Many developing countries face similarly difficult financial conditions amid high energy prices, currency weakness and mounting external debt.

"We are in a place like all other countries," Ruto said. "There will be no default."

Kenya’s cabinet in January approved a decision to join the China-led Asian Infrastructure Investment Bank.

"With its fundraising options narrowing due to default risk, China has become the last resort," said George Sato, head of the Nairobi office of the Japan External Trade Organization (JETRO).

Ruto’s diplomatic efforts have ranged far and wide, with about 50 trips abroad since he took office in September 2022, according to JETRO.

"We have excellent relations with the World Bank. We have excellent relations with the IMF," he said. "We have excellent relations with many other countries that support our development."

Kenya has long been an entry point for multinationals seeking to expand in Africa. Mombasa serves as an important gateway to East Africa for ship traffic from Europe and Asia, and has geopolitical significance.

Asked about Kenya’s relationship with Russia, Ruto reiterated his stance against Moscow’s invasion of Ukraine. Nairobi has been an early and consistent critic of the invasion, even as Russia’s influence in Africa has grown.

"We oppose the invasion of any country, the interference of territorial integrity of any country, including Ukraine, and the sovereignty of any country," he said.

But Ruto also suggested that Kenya does not intend to cut off trade with Moscow over the conflict.

"We also believe in free trade. We believe that trade is an instrument of development," he said, adding that "trade relations must be looked at in terms of national interest."

Ruto met with Russian Foreign Minister Sergey Lavrov in Nairobi last year and discussed expanding trade, among other issues.

Africa has seen coups in recent years in countries such as Sudan and Niger.

"We are firmly against any undemocratic overthrow of any government," Ruto said, adding that Kenya is supporting these countries in returning to democracy.

asia.nikkei.com