Kenya to spend Sh640.8bn to pay debts

Passengers travel to Mombasa using a Madaraka Express train at the Nairobi terminus in Syokimau on July 25, 2019. PHOTO | FILE | NATION MEDIA GROUP Treasury Cabinet Secretary Ukur Yatani proposes to increase commercial financing from four to 13 per cent in the financial year that begins in June.

The country’s public and publicly guaranteed debt has grown by an annualised rate of 19 per cent over the last 10 years.

Kenya is expected to spend up to Sh640.8 billion in the current fiscal year to service its Sh5.3 trillion debt, the 2020 Economic Survey report shows.

The country’s total stock of public debt went up by 16.8 per cent as at the end of June 2019, from Sh4.5 trillion the previous year.

That also saw the external debt, which accounted for 57 per cent of the total debt, growing by 17.7 per cent to stand at Sh3.02 trillion.

The external debt stood at Sh2.56 trillion in 2018. The National Treasury saw its appetite for domestic debt rise by 15.7 per cent to Sh2.29 trillion.

Already, Treasury wants to change the country’s external debt composition by reducing concessional borrowing to 15 per cent in the 2020/21 financial year, from the current 34 per cent.

Treasury Cabinet Secretary Ukur Yatani proposes to increase commercial financing from four to 13 per cent in the financial year that begins in June.

This will see commercial borrowing increase to Sh274.4 billion from Sh313.1 billion.

China remains Kenya’s top creditor, with the debt growing by more than Sh100 billion between June last year and a similar period in 2018 from Sh560.5 billion to Sh661.05 billion at the start of the current financial year.

BORROWING INCREASED This was part of the money used to finance the standard gauge railway.Kenya also saw its debt from Japan increase by 38.4 per cent to stand at Sh135.2 billion, from Sh97.7 billion.The United States reduced its debt to Kenya to Sh2 billion from Sh2.6 billion in 2018. Washington’s debt to Kenya stood at Sh4.4 billion in 2015.The amount owed to the International Development Association/International Fund for Agricultural Development rose by 12.7 per cent to Sh591.3 billion at the end of June 2019.The country also the borrowing from the African Development Bank (AfDB) grow by 12.2 per cent to Sh229.6 billion; while the amount owed to the International Monetary Fund (IMF) dropped from Sh71.5 billion to Sh49.2 billion, the report said.Kenya increased its borrowing from international […]

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