Kenya is not facing debt crisis, assures Treasury CS

Kenya will not tap the debt relief programme by the group of 20 richest countries due to stringent conditions.

In his post-budget briefing, National Treasury Cabinet Secretary Ukur Yattani said Kenya is not facing debt servicing crisis that warrants debt restructuring.

In April the group of 20 richest countries outlined a debt relief programme targeting developing economies in an attempt to free 2.2 trillion shillings to help struggling economies deal with the Covid-19 pandemic.

The Treasury CS has assured Kenya is not facing any debt servicing crisis at a time when the country’s debt portfolio is expected to breach the 7 trillion shillings mark this year.

The government has rolled out an aggressive fiscal consolidation exercise in the face of shrinking revenue due to the Coronavirus pandemic.

In April the group of 20 richest countries outlined a debt relief programme targeting developing economies in an attempt to free 2.2 trillion shillings to help struggling economies deal with the Covid-19 pandemic.

Some of the significant financial assistance that Kenya has received from multi-lateral partner include;

The country received Ksh 78.3 billion under the Rapid Credit Facility of the International Monetary Fund to help address the impact of the COVID-19 Pandemic. This financial support is fully concessional at zero interest rate.

Ksh 108.0 billion was also received from the World Bank under the second Development Policy Operation, as both budgetary support and extra resources to help fight the Pandemic.

The World Bank extended support of Ksh 6.8 billion under the Contingency Emergency Response to the Ministry of Health for prompt preparations and response at the initial phase of the COVID-19 outbreak.

The Government has also received Ksh 22.5 billion from the African Development Bank as a concessional loan and an additional Ksh 7.5 billion commitments from the European Union in form of grants.