National Treasury Cabinet Secretary Ukur Yatani launches the Economic Survey 2020 at Treasury Building, in Nairobi, on April 28, 2020. PHOTO | EVANS HABIL | NATION MEDIA GROUP Kenya is seeking Sh275 billion in loans from the World Bank, the European Union (EU) and the International Monetary Fund (IMF) to plug the gap in revenue created by the Covid-19 stimulus package .
The Treasury has asked for Sh100 billion from the World Bank, Sh75 billion from the IMF and Sh100 billion from the EU Investments Bank.
The government, which was expecting a Sh20 billion grant from the EU, has also announced plans to negotiate the repayment of loans to China .
A third of the country’s debt due this year is owed to China, with Kenya expected to hand the Asian giant some Sh78.4 billion.
Kenya’s debt has risen to Sh6.2 trillion, or 58 per cent of its wealth. Last year, the National Assembly raised the debt ceiling to Sh9 trillion.
The Treasury also wants to spread out or stagger the contracting of external loans over the 2019/20 and 2020/21 financial years so as to cushion the economy from the coronavirus effects.
It is also looking at lowering the fiscal deficit from the 2016/17 high of 8.9 per cent to 3.5 by 2022/23, reducing commercial borrowing by gradually shifting to concessional loans, moving from Treasury bills to Treasury bonds and cancelling or reallocating external loans to priority projects.
“We are engaging donors, the IMF and World Bank for emergency support. We still have space to borrow from the domestic market and development partners to bridge the shortfalls in revenue,” Treasury Cabinet Secretary Ukur Yatani told a Senate ad hoc committee on Wednesday.
GROWTH OUTLOOK
Besides the Exim Bank of China, Kenya has also borrowed Sh43.3 billion from the Trade Development Bank, IDA (Sh27.3 billion), France (Sh17.5 billion), Italy (Sh8.9 billion), Japan (Sh5.7 billion), ADB/ADF (Sh8.1 billion), Germany (Sh2.9 billion) and Spain (Sh2.2 billion).
The request to the IMF was made Wednesday, with a response expected in 10 days.The World Bank had already given Kenya Sh6 billion to help it fight the coronavirus.Like many countries, fears were rife that Kenya might not pay her loans. “Kenya continues to meet its debt obligations. We have never defaulted,” Mr Yatani said.The minister added that the government released Sh1.3 billion via M-Pesa to vulnerable Kenyans in slums to mitigate the effects of the pandemic. “The programme will cost Sh10 billion,” he […]
