njuguna ndung u
Treasury Cabinet Secretary Njuguna Ndung’u has dismissed Controller of Budget Margaret Nyakang’o’s claim that the country is paying excessive interest rates on borrowing.
In a statement, Ndung’u stated that Kenya does not hold any World Bank or IMF loans at 14.5 percent interest.
“We urge the controller of Budget to disseminate factual information to the public and uphold the integrity of the constitutional office,” he said.
Ndung’u went on to say that Nyakang’o’s words could cause confusion in the country and have far-reaching consequences for Kenya’s relationships with global loan partners and foreign investors.
On Thursday, while speaking before the Public Debt and Privatisation Committee, the Controller of Budget expressed alarm over the country’s rising debt interest rates.
She informed MPs that the country paid extra for its recently issued Eurobond. The auditor went on to add that the newly bought-back debt had a higher interest rate of 10.37% than the 2014 bond, which offered 6.87%.
She went on to say that refinancing does not alleviate the country’s current difficulties, but rather pushes them off to a later date, making the loans more expensive over time.
“While interest rates have shot up everywhere over the last couple of years, a double-digit borrowing cost remains one of the most obvious warning signs that all is not well in our country. Kenya was compelled to refinance at a higher interest rate to offset the $ 2 billion bond (sh 292,000,000,000) payment looming in June 2024,” said Nyakango.
This follows President Ruto’s statement at the cabinet retreat in Naivasha that the government’s prudent economic management has positioned the country for progress.
The President stated that budgetary discipline and careful debt management have helped Kenya avoid debt distress.
He also stated that the country’s finances are in good shape, creating the circumstances for the successful implementation of the Bottom-Up Economic Transformation Agenda.
