ANC party leader Musalia Mudavadi who now wants Kenya to renegotiate bilateral and multilateral debts with its external lenders, including those in the Eurobond market, due to the Covid-19 pandemic. PHOTO | TONNY OMONDI | NATION MEDIA GROUP Amani National Congress (ANC) party leader Musalia Mudavadi wants Kenya to renegotiate bilateral and multilateral debts with its external lenders, including those in the Eurobond market, due to the Covid-19 pandemic.
In an exclusive interview with the Nation , the ANC leader said Kenya should ask the lenders to relax debt repayment terms or have some loans written off in the wake of the virus crisis that is taking a heavy toll on the economy.
"Kenya should move swiftly to the negotiating table with our creditors and ensure there is rescheduling of loan repayment terms because we are headed to very difficult economic times. Let us have a round table with our creditors like China and others and negotiate on how to get out of the multi-trillion debt shackles as we plan to rebuild the already ailing economy," said Mr Mudavadi.
INTEREST WAIVERS
Mr Mudavadi said the lenders can give waivers on interests or defer repayment of the loans by restructuring them. He cited such loans like those borrowed for building of the standard gauge railway (SGR), dams and other mega projects in the country.
"The debt status of our country must worry us in this season of the Covid-19 pandemic, especially because the shilling is sliding against the dollar. Even before the outbreak of the disease, Kenya was already in a bad place, which the virus will worsen. Our public debt, especially, has soared over the past seven years due to impulsive borrowing," he said.
RATIONALISE PROJECTS
The ANC leader urged the government to quickly rationalise its projects and programmes due to the heat of the pandemic and prioritise on renegotiating the country’s debts.
"Kenya’s national debt hit the permitted borrowing ceiling of Sh6 trillion years back and the Senate approved a Sh9 trillion ceiling. The situation is already bad. But some countries like China owe Kenya some level of compassion and comfort and should open space for renegotiation and rescheduling of loans," added Mr Mudavadi.
The former Finance minister has also proposed a five year recovery strategy which he says should involve the formulation of a national policy that will guide the country post-Covid-19.
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