Kenya must pay Ksh. 161 billion in debt by October, which includes Ksh. 116 billion from Eurobond payments due by May 2027 and Ksh. 952 million from syndicated loans due in eight months. The overall financial strategy aims for a balanced ratio of domestic and foreign debt to limit taxpayer exposure to interest rate changes.
Kenya is under obligation to settle a Ksh. 161 billion debt by October, as stated by Cabinet Secretary Mbadi during a discussion on Spice FM. He highlighted that this debt primarily stems from Eurobond and syndicated loans, necessitating strategic payment plans to sustain the country’s financial health.
The Eurobond segment requires Ksh. 116 billion to be paid in three equal installments, amounting to Ksh. 38.8 billion annually until the deadline of May 2027. Moreover, Kenya must address Ksh. 952 million from syndicated loans, which is due within an eight-month timeframe.
“In September, we are supposed to pay Ksh. 25.8 billion to the Trade and Development Bank, another Ksh. 10 billion, and Ksh. 83.5 billion, adding Ksh. 3.4 billion to total Ksh. 123 billion by October,” Mr. Mbadi elaborated, indicating the financial strain Kenya faces. Additionally, he noted that Ksh. 38 billion will be required for the Eurobond by 2025.
Kenya’s strategy aims to maintain a balanced mix of domestic and foreign debt, which currently stands at approximately Ksh. 5.6 trillion in domestic borrowing and Ksh. 5.1 trillion in foreign debt, adhering to a near 50:50 ratio to shield taxpayers from interest rate volatility.
The ongoing debt crisis has posed challenges for both current and past administrations, impacting Kenya’s economic stability. The country is currently managing three categories of debt: multilateral, bilateral, and commercial. Multilateral debt is sourced from global financial institutions, seen as relatively manageable, while bilateral transactions occur between nations. Commercial debt, comprising instruments like Eurobonds and syndicated loans, typically bears higher interest rates, intensifying repayment pressure.
In summary, Kenya faces an urgent requirement to resolve a substantial debt obligation by October, with specific amounts due to various institutions. The government is focused on maintaining a balanced approach to its domestic and foreign debts to mitigate the potential risks associated with fluctuating interest rates. Addressing these debts is critical for ensuring the economic resilience of the nation.
Original Source: www.citizen.digital
