THE BRI in Africa: The Kenya Standard Gauge Railway
The Standard Gauge Railway (SGR) project represented a clear opportunity for China’s Belt and Road Initiative (BRI) to aid in the economic development of a rapidly rising East African economy. Like most BRI projects across the globe the project focused on transportation and logistical infrastructure. As a component of the Maritime Silk Road, the SGR could potentially open East and Central Africa to global trade and development, including opportunities for China’s business-export expansion. However, with the completion of the railway’s first two stages, SGR’s operating deficit and heavy debt obligations threatened the project’s expansion and success. Many now questioned whether the project would truly benefit Kenya.
The objective of this case is to help students understand:
1. The challenges that developing countries face in attracting financing for large infrastructure projects.
2. The roles that politics can play in international business.
3. The relationship between infrastructure and development.