This archive report was first published on 27 June 2021.
Published on June 27, 2021, Kenya successfully raised $1 billion in its Eurobond sale, marking an oversubscription that reflects enormous confidence in the country's economy and prospects.
The 12-year bonds, priced to yield 6.3%, received more than $5.4 billion in orders after a successful three-day roadshow. According to Treasury Cabinet Secretary Ukur Yatani, the oversubscription is a testament to the country's economic recovery from the COVID-19 pandemic.
Kenya is caught in a delicate balancing act between financing its economic recovery and cutting down its vast public debt load. The economy is expected to record a growth of 6.6% in 2021, up from 0.6% last year.
Authorities are relying on improved revenue collection to cut the fiscal deficit to 7.5% of GDP, beginning in the new financial year from 8.7% in the 2020/21 financial year. Investors have been bullish since the country reached a deal with the International Monetary Fund, with analysts saying the agreement has given confidence to bondholders.
Kenya faces a huge budget deficit in 2021/22, which it plans to fill with external and domestic debt. Public debt-service costs are expected to surge to a record KSh 1.17 trillion ($10.8 billion) in the year, equivalent to about two-thirds of national revenue.
