Trump Cancels Sh7.4 Billion Deal With Kenya Signed By Biden and Ruto

The Biden-era Sh7.4 billion agreement to support Nairobi’s Bus Rapid Transit (BRT) system has been scrapped by US President Donald Trump, plunging one of Kenya’s flagship urban mobility projects into fresh uncertainty and widening the financial hole in the city’s stalled public transport overhaul.

Treasury disclosures show that the Millennium Challenge Corporation (MCC) Threshold Program, which was designed to run until mid-2027 and unlock major reforms and investments in Nairobi’s transport and land-use planning, is now being formally terminated.

Kenya has already received official notice of cancellation from Washington.

The programme was signed in New York on September 19, 2023 during President William Ruto’s visit to the United Nations General Assembly, and came into force in May 2024 following his state visit to the White House.

It was one of the cornerstone agreements of Ruto’s engagement with then US President Joe Biden, promising Sh5.8 billion in American support and a Kenyan contribution of Sh1.56 billion.

The MCC threshold package was meant to strengthen Nairobi’s long-term urban planning, expand safe pedestrian and cycling infrastructure, integrate gender-inclusive public transport, and support the acquisition of climate-friendly buses for the emerging BRT network.

Treasury officials noted in last week’s Sector Budget Proposal Report that the programme is now earmarked for termination.

Kenya had hailed the deal as a breakthrough for modernising public transit in a city long overwhelmed by congestion and ageing matatu fleets.

At the signing ceremony, Treasury Cabinet Secretary Njuguna Ndung’u said the investment would strengthen transport and land-sector institutions and deliver long-lasting benefits to Nairobi residents. Those ambitions are now in doubt.

President Trump returned to the White House on January 20, 2025 after defeating Kamala Harris, and immediately launched a sweeping rollback of Biden’s foreign policy and development portfolio.

His administration has already begun dismantling USAID and reviewing nearly all foreign aid agreements.

Trump announced plans to eliminate more than 90 percent of USAID contracts and cut about $60 billion in global assistance.

Kenya has been among the hardest hit, with the value of cancelled American contracts now exceeding Sh108 billion.

The BRT programme is one of the biggest casualties. Funding shortages have already slowed payments to contractors and delayed key components of Nairobi’s five-line BRT network.

The cancelled MCC contribution was expected to partially fund Line 2, the Simba corridor serving Rongai, Lang’ata, the CBD, Ruiru, Thika, and Kenol. The line was to feature 10 intermediate stations, park-and-ride hubs, and dedicated lanes along Thika Road.

Other segments of the BRT network remain dependent on international partners.

Line 3 is backed by €320 million and will run from Tala and Njiru through Dandora and the CBD to Ngong, with 120 planned electric buses. Line 4 is supported by the African Development Bank and connects Donholm and the CBD to Karen and Kikuyu.

Line 5 will rely on financing from the Korean Exim Bank for its Sh7.3 billion Outer Ring Road corridor. Line 1 will operate from Limuru to Imara Daima through the Nairobi Expressway.

Collectively, the BRT lines were expected to deliver dedicated lanes, modern stations, footbridges, CCTV enforcement systems, park-and-ride facilities, and EV-charging depots.

With the US withdrawal, Kenya faces a widening financing gap that threatens project timelines and the realisation of a clean, integrated, rapid-transit system for the capital.

The Transport ministry recently announced the completion of the Business Management Centre at the Kasarani Depot, an essential operations hub for the Line 2 corridor.

Without the MCC funds, officials now fear the broader urban mobility plan could fall further behind schedule at a time when congestion and air-quality challenges in Nairobi continue to worsen.

For Kenya, the collapse of the MCC deal marks not only a setback for sustainable transport but also a broader signal of shifting geopolitical winds as the Trump administration recalibrates America’s development footprint.

The government will now be forced to seek alternative financing to rescue the BRT programme or risk watching one of Nairobi’s most ambitious infrastructure missions stall indefinitely.