This archive report was first published on 10 June 2020.
Kenya's public debt has reached Sh6.28 trillion, with almost half owed to external creditors, as of March 2020.
According to Treasury Cabinet Secretary Ukur Yatani, Kenya is still in talks with China for a debt relief deal, opting for bilateral negotiations instead of participating in the G20-led initiative.
Yatani had raised concerns that the G20 deal's terms would limit Kenya's access to international capital markets and hinder its ability to finance its deficit later in the year.
Kenya could have saved around Sh71 billion from the debt service suspension offered by the G20, but instead chose to engage creditor countries individually to secure moratoriums on debt service payments lasting around a year.
Kenya's budget deficit for the next financial year stands at Sh823 billion, with Treasury expected to borrow Sh349.7 billion externally and Sh486.2 billion from the domestic market.
The Parliamentary Budget Office (BPO) has recommended that Treasury temporarily abandon contracting new expensive commercial loans and hold discussions for debt restructuring deals with Kenya's external creditors.
On Monday, the Chinese government announced that it had agreed to delay loan repayments for 77 low-income countries as part of the G20 nations' debt relief programme, with the moratorium starting on May 1.
