Ruto Finally Cracks Ksh 153B Eurobond Payment Dilemma
President William Ruto’s government is nearing the final stages of securing a Ksh153 billion (USD1 billion) loan from China.
As per the Central Bank of Kenya, the funds scheduled for distribution at the beginning of the upcoming year will be allocated partially towards settling the Ksh300 billion Eurobond that reaches maturity in June 2024.
CBK disclosed that Kenya was actively in communication with the Chinese Government regarding the loan, aiming to enhance foreign exchange reserves as anticipated.
“The timing is yet to be ascertained but we were to get it before June 2024. It could be used to address the maturity of the Eurobond,” CBK Governor Kamau Thugge remarked as quoted by Reuters.
With Kenya’s debt edging closer to reaching Ksh11 trillion, concerns have arisen that the country might fail to meet its global financial commitments.
The combination of recent borrowings from the World Bank and International Monetary Fund, along with an anticipated loan of Ksh153 billion from China, is poised to enable Kenya to settle the debt it accrued in 2014.
In May, Kenya obtained a loan of Ksh153 billion (equivalent to USD1 billion) from the World Bank, and in November, it received a nearly identical sum from the IMF.
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During a parliamentary State of the Nation Address on November 9, President William Ruto committed to making a payment of half the Eurobond by December 2023, which is six months ahead of its maturity date.
“I can now confirm with confidence that we will and we shall pay the debt that has become a source of much concern to citizens and markets,” he stated at the time promising that the rest of the amount would be serviced by a loan from China.
In 2014, Kenya obtained the Eurobond during the tenure of former President Uhuru Kenyatta to back infrastructure and developmental initiatives.
When initially projected, Kenya was expected to make a payment of Ksh170 billion. However, due to the devaluation of the Kenyan Shilling compared to the dollar, the sum has now escalated to more than Ksh300 billion.
President Ruto embarked on a journey to China on October 18 to initiate discussions for a loan intended to contribute to the funding needed to finalize unfinished infrastructure projects.
Ruto Finally Cracks Ksh 153B Eurobond Payment Dilemma