April 8, 2021
Kenya is once again set to borrow another KSh 780 billion in Eurobonds despite its rising public debt and mounting pressure to slow down on borrowing rate. The details emerged through the International Monetary Fund (IMF), which revealed that President Uhuru Kenyatta’s government is in the international market seeking additional funds for the next one and half years.
According to a borrowing plan submitted to IMF by the National Treasury, Kenya plans to borrow KSh 528 billion in concessional loans, which have long grace periods.
Another KSh 253 billion, on the other hand, would be commercial loans that come with high-interest rates and a short term repayment period.
The IMF noted the loan programme allows the country to borrow more funds for debt repayment.
Treasury in January indicated it planned to push parliament to raise the country’s debt ceiling from the current KSh 9 trillion to a new limit of KSh 12 trillion.
The move, the exchequer stated, aims to enable the government to borrow more to finance the 2021/2022 budget, which, from the projections and all indications, is likely to suffer a serious financial shortfall running into billions of shillings due to revenue constraints.
According to statistics by the Central Bank of Kenya, the country’s public debt stood at KSh 7.2 trillion as of November 2020. The domestic debt was estimated at KSh 3.4 trillion, while the external debt was KSh 3.7 trillion.