Kenya must repay Ksh.161 billion by October due to accumulated Eurobond and syndicated loans. Key payments include Ksh.116 billion by May 2027 and Ksh.123 billion due in September. The government balances domestic and foreign debt at nearly Ksh.5.6 trillion and Ksh.5.1 trillion, respectively, while combating high commercial loan interest rates.
Kenya is facing a significant debt obligation of Ksh.161 billion, which is due by October, as reported by Finance Cabinet Secretary Mbadi on Spice FM. This debt has been primarily accumulated through Eurobond and syndicated loans. Specifically, Ksh.116 billion from Eurobonds is slated for repayment by May 2027, distributed in three annual installments of Ksh.38.8 billion. Furthermore, the country has an obligation of Ksh.952 million from syndicated loans that must be settled within eight months.
In September alone, Kenya is required to pay Ksh.25.8 billion to the Trade and Development Bank, in addition to Ksh.10 billion and Ksh.83.5 billion, culminating in Ksh.123 billion owed by October. Additionally, Ksh.38 billion is projected as needed for Eurobond repayment in 2025. The mounting pressure from these payments has intensified concerns regarding fiscal sustainability.
The Kenyan government maintains a domestic to foreign debt ratio of nearly 50:50, aiming to limit taxpayer exposure to fluctuations in interest rates. Currently, the government reports Ksh.5.6 trillion in domestic borrowing compared to Ksh.5.1 trillion in foreign debt. Balancing this ratio is crucial for managing potential risks associated with varying interest rates on these debts.
Kenya’s debt comprises three main categories: multilateral, bilateral, and commercial. Multilateral debt involves loans from institutions such as the World Bank and IMF, which are generally more affordable for countries in debt distress. Bilateral debt refers to agreements between Kenya and other sovereign nations, while commercial debt, including Eurobond and syndicated loans, is typically associated with higher interest rates, increasing repayment pressures.
In summary, Kenya must address its substantial debt obligations amounting to Ksh.161 billion by October, highlighting the critical need for effective debt management to sustain economic stability. The balance between domestic and foreign borrowing is essential to mitigate taxpayer risks associated with fluctuating interest rates. As various forms of debt loom, including high-rate commercial loans, strategic planning is imperative to navigate the ongoing fiscal challenges.
Original Source: www.citizen.digital
