Kenya Faces Ksh. 161 Billion Debt Repayment by October, Reveals CS Mbadi
Cabinet Secretary Mbadi revealed that Kenya must repay Ksh. 161 billion by October, primarily from Eurobond and syndicated loans. The repayment plan includes Ksh. 116 billion Eurobond due by May 2027 and Ksh. 952 million from syndicated loans in eight months. Kenya maintains a near equal debt ratio of Ksh. 5.6 trillion domestic and Ksh. 5.1 trillion foreign, amidst rising financial pressures.
Kenya faces a significant debt obligation of Ksh. 161 billion due by October, according to Cabinet Secretary Mbadi during his interview on Spice FM. He detailed that the bulk of these liabilities stem from Eurobond and syndicated loans, which denote commercial loans from financial institutions directly engaged with the Kenyan government.
Kenya will need to repay Ksh. 116 billion related to the Eurobond by May 2027, structured in three equal annual installments of Ksh. 38.8 billion until the due date. Additionally, the government is tasked with repaying Ksh. 952 million from syndicated loans within the next eight months.
Furthermore, Mbadi noted upcoming payments in September, amounting to Ksh. 25.8 billion due to the Trade and Development Bank, Ksh. 10 billion, and Ksh. 83.5 billion, totaling Ksh. 123 billion. He emphasized, “This is besides the Eurobond (Ksh. 38 billion needed in 2025). That is the kind of pressure we’re in.”
The fiscal strategy currently maintains a near equal ratio of domestic and foreign debt, approximately Ksh. 5.6 trillion in local loans compared to Ksh. 5.1 trillion in foreign obligations, a balance aimed at shielding taxpayers from interest rate volatility. Mbadi remarked, “(Domestic borrowing) is almost balancing 50/50.”
Kenya’s escalating debt crisis presents a considerable challenge for successive administrations, hindering economic growth and stability. The country grapples with multilateral, bilateral, and commercial debt responsibilities, with multilateral loans generally considered more manageable for a nation under fiscal stress.
In summary, Kenya is under substantial financial pressure with an impending debt repayment of Ksh. 161 billion, attributed primarily to Eurobond and syndicated loans. The government aims to manage its debt through a balanced approach between domestic and foreign borrowing while navigating the economic implications of high-interest commercial loans. As the country continues to address its debt challenges, it remains pivotal for long-term economic stability.
Original Source: www.citizen.digital
