national treasury
Kenya has been facing a significant risk of debt distress which has forced the government to increase taxes in a move to repay the loans taken majorly between 2013 and 2023.
Most of these loans were commercial, meaning they carried high interest rates. Meanwhile, the infrastructure projects that were built through the loans did not generate the expected revenues.
Out of the nearly Sh10 trillion debt, Kenya owes the International Development Association (IDA) Sh 1.6 trillion, Exim Bank of China Sh881 billion, Citigroup Global Markets Deutschland AG Sh562 billion and Citigroup Global Markets Europe AG -Sh436 billion.
Kenya also owes the International Monetary Fund (IMF) Sh335 billion, the African Development Fund Sh314 billion, the Trade and Development Bank Sh217 billion, the African Development Bank Sh204 billion, and the International Bank for Reconstruction & Development – Sh152 billion
The country also has a Sh 100 billion debt to Agence Francaise De Development and Sh 99 billion to the Government of Japan.
In February, Kenya paid more than 10 percent on international bonds in order to have the cash to cover payment on a $2 billion Eurobond from 2014.
According to the Economist Intelligence Unit, Kenya’s debt dynamics changed in 2020-2022 when it turned to concessional multilateral borrowing from the IMF, World Bank, and African Development Bank to cope with the effects of the COVID-19 pandemic.
Countries like China, Japan, and France as well as big commercial banks in Italy, Germany, and Britain have in recent years cut back their lending to Kenya in what they termed as taking too many risks by lending to low-income countries.
Also Read: Kenya Settles Part Of 2 Billion Dollars 2014 Eurobond
