Debt headache compounds Kenya’s worries amid fears for economy
- The impact of the Covid-19 pandemic is likely to be felt in July when the country will need Sh630 billion to settle debts that will fall due.
- Kenya’s total debt reached a new high of Sh6.3 trillion on March 20.
- This position has been made worse by the depreciation of the shilling, which has reached an average of Sh106.7 to the dollar, one of the lowest this month.
- The debt position will get worse in coming months as the shilling weakens further, given that most of Kenya’s debt portfolio is dollar denominated.
The amount of debt falling due this year has dropped by Sh29 billion after reconciliations passed through the supplementary budget by the National Treasury.
The drop has revised what Kenya planned to pay this year to Sh253.2 billion, down from the Sh282.3 billion that was contained in the original budget for 2019/20.
The revision comes at a time Kenya has started talks with foreign lenders with a view of getting repayment holidays at a time the world is headed into a recession due to the Covid-19 pandemic.
President Kenyatta revealed last week that Kenya had opened talks with external lenders to suspend debt during the Covid-19 crisis.
“We’re in discussion with the largest economies in the world on the issue of suspension of debt for a period in order to allow us to spend more combating this pandemic,” the President said
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