Business
Yatani goes for Sh60 billion loan as Kenya’s debt piles
The National Treasury is going for a Sh60 billion loan from local investors to fund infrastructure development after the country’s debt piled to Sh7.35 trillion in January this year, down from Sh7.28 trillion last December.
The debt is still expected to pile further if the treasury succeeds to secure Sh262 billion from the International Monetary Fund (IMF) in the current financial year ending June.
Projections are already showing that Kenya will borrowed close to a Sh1 trillion by this financial year but that will depend on whether part of the IMF funds will be used to refinance some of the maturing external loans.
Treasury CS Ukur Yatani, he defends over borrowing [p/courtesy]
The move to borrow from local investors comes after government borrowed up to Sh407.8 billion from the market by March 19, including commercial banks, pension funds, insurance firms and parastatals.
But the new infrastructure bond and the stock of domestic bond will shoot to Sh467.8 billion should CBK get sufficient subscribers. Experts argue that over subscription of the bond can allow CBK to borrow more than Sh60 billion in the current FY ending June.
The Ukur Yatani led docket is going for more loans despite when it vowed to stay away from expensive commercial loans. The National Treasury has also hinted that Kenya will return to the Eurobond market to borrow at least Sh124 billion by end of June 2022 to offset part of the principal repayment of Sh351 billion..
Kenya has already received over Sh500 billion from multilateral institutions as IMF, African Development Bank and World Bank meaning it will have to shop for other sources to fund a Sh3.01 trillion budget.
Director-General for Public Debt Management at the Treasury Haron Sirima said Kenya will have to access international markets for loans to support the budget and pay expensive loans that will soon be due.
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