This archive report was first published on 7 January 2020.
Published on January 7, 2020, Kenya's National Treasury has announced plans to refinance its commercial debt with cheaper debt from development financiers and ally nations. According to acting Head of the National Treasury, Ukur Yatani, this move aims to lower the high level of public debt which rose to 62% of the GDP in the past year.
The Kenyan Government has been warned repeatedly by the IMF and economists about the mounting debt. In 2019, the debt hit an all-time high of KSh6 trillion. Despite this, the government remains determined to lower the debt to manageable levels.
However, the need to finance projects in healthcare, manufacturing, agriculture, and housing is expected to push the level of national debt upward. These projects are necessary to maintain an economic growth rate above 5%.
Public debt is expected to reach KSh6.7 trillion by the end of this year. Since taking office in July 2019, acting Minister of Finance, Dr. Ukur Yatani, has made changes aimed at reducing government expenditure, including limiting foreign trips for public officials and cutting expenditure on international travels.
As revealed in an opinion piece published in the Daily Nation, Dr. Ukur Yatani intends to refinance the commercial loans with affordable concessionary debt.
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