Kenya is obligated to repay Ksh.161 billion in debt by October, including Ksh.116 billion from Eurobonds and Ksh.952 million from syndicated loans. Immediate payments totaling Ksh.123 billion are due, while the government balances domestic and foreign debt. The ongoing debt crisis poses serious risks to the country’s economic stability.
Kenya faces a significant repayment obligation of Ksh.161 billion by October, as articulated by Cabinet Secretary Mbadi during a segment on Spice FM. He detailed that this debt originates from Eurobond and syndicated loans. A critical component includes Ksh.116 billion attributable to a Eurobond, with payments structured in three equal installments of Ksh.38.8 billion each, due by May 2027. Furthermore, Ksh.952 million from syndicated loans is expected to be resolved within eight months.
Mbadi elaborated on the immediate financial obligations, indicating that Ksh.25.8 billion is due to the Trade and Development Bank, in addition to Ksh.10 billion and Ksh.83.5 billion from other sources. Collectively, these payments total Ksh.123 billion required by October, not including Ksh.38 billion due in 2025 from a Eurobond.
Kenya’s current fiscal approach aims to maintain a balanced ratio of domestic and foreign debt, approximately aligned at 50%. At present, domestic borrowing stands at about Ksh.5.6 trillion, while foreign debt is slightly lower at Ksh.5.1 trillion. This strategy is designed to mitigate the risks associated with interest rate fluctuations, protecting taxpayers from potential increases.
The ongoing debt crisis in Kenya has presented challenges to both current and previous administrations, impacting the nation’s economic growth and stability. Presently, Kenya is grappling with three categories of debt: multilateral, bilateral, and commercial. Multilateral debt involves loans from global financial institutions, regarded as more manageable during periods of debt distress.
Bilateral debt emerges from agreements with individual countries, while commercial debt, evidenced by Eurobonds and syndicated loans, tends to incur higher interest rates. This reality compels countries like Kenya to prioritize timely repayments to avoid default and further financial complications.
In conclusion, Kenya is under severe financial pressure with Ksh.161 billion in debt due by October, which includes significant Eurobond obligations. The government aims to balance its domestic and foreign debt while managing a complex array of multilateral, bilateral, and commercial financing sources. Addressing this ongoing debt issue is crucial for the nation’s long-term economic stability and growth.
Original Source: www.citizen.digital
