Treasury CS Ukur Yattani has refuted claims that China fined Kenya Ksh1.3 billion for defaulting on Standard Gauge Railway loan.
In a statement issued on Thursday, October 13 Yattani stated that the reports were false and that the country had not failed to service its debt.
“We wish to state categorically that Kenya has never defaulted on the settlement of its debt service obligations to any of its creditors, nor has any creditor filed or reported any claim of default on debt service payments on facilities extended to the Government of Kenya.Furthermore, Kenya has not accumulated any debt arrears in decades to suggest difficulties in debt servicing,” the statement read in part.
The Treasury further stated that Kenya would not be flagged by financial institutions outlining the SGR loan repayment model.
“As a country accessing international financial markets to raise resources, Kenya undergoes frequent independent sovereign rating reviews whose outcomes are published widely. At no time has Kenya been flagged as a country defaulting on its external debt obligations.
“It is also important to note, that all public debt, including the SGR loans are paid from the Consolidated Fund in accordance with the Public Finance Management Act, 2012. Debt service is a first charge on the Consolidated Fund and takes precedence over other forms of expenditure,” Treasury added.
Reports had earlier emerged that the Kenyan government had been fined Kenya KSh1.312 billion in the last financial year that ended in June following a non-remittance of the Standard Gauge Railway (SGR) loans.
“This (Sh1.312B) relates to the cost of default on interest at one percent of the due amount,” read the documents in part as reported by the Business Daily.
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