This archive report was first published on 16 September 2021.
Kenya's Controller of Budget, Margaret Nyakango, has raised concerns over the country's Sh1.7 billion commitment to secure foreign loans, citing the need to cancel the loans to ease the debt burden on taxpayers.
According to Nyakango, the Treasury paid the commitment fees for loans to Japanese, Chinese, and European banks at the end of June, adding to the country's ballooning debt.
The loans, worth Sh1.657 billion, are for 17 projects, including the expansion of the Jomo Kenyatta International Airport, power connections, and the construction of a dam to ease water supply hitches to Nairobi.
Commitment fees are charged on borrowers for credit that has not been advanced and are a way of guaranteeing that a lender will keep the funds.
Nyakango's call to drop the loan applications comes at a time when Kenya's maturing debt has piled pressure on the country's expenditure plans and squeezed funds for development projects.
Kenya has budgeted Sh1.169 trillion towards debt repayment in the year to June, representing 36.6 per cent of the budget—the highest component of spending for the financial year.
Friday, September 17, 2021
