This archive report was first published on 18 May 2020.
As Kenya grapples with the economic fallout of the Covid-19 pandemic, Amani National Congress (ANC) party leader Musalia Mudavadi has called for the renegotiation of the country's foreign debts. In an exclusive interview, Mudavadi emphasized the need for Kenya to seek relief from its external lenders, including those in the Eurobond market, due to the pandemic's severe impact on the economy.
"Kenya should move swiftly to the negotiating table with our creditors and ensure there is a rescheduling of loan repayment terms because we are headed to very difficult economic times," Mudavadi said, urging the government to work with lenders to relax debt repayment terms or have some loans written off.
Mudavadi cited specific loans, such as those borrowed for the standard gauge railway (SGR) and dams, as examples of debt that could be restructured to ease the burden on the economy. He also emphasized the need for the government to prioritize renegotiating the country's debts, given the country's public debt has soared over the past seven years due to impulsive borrowing.
"The debt status of our country must worry us in this season of the Covid-19 pandemic, especially because the shilling is sliding against the dollar," Mudavadi said, adding that some countries, like China, owe Kenya a level of compassion and comfort and should open space for renegotiation and rescheduling of loans.
As part of his proposed five-year recovery strategy, Mudavadi suggested formulating a national policy to guide the country post-Covid-19, which would involve creating incentives to increase investor confidence on a long-term basis. He also emphasized the need to revive sectors like tea, hides and skins, horticultural, and export, as well as rethinking local tourism to help the tourism sector recover.
Published on May 18, 2020
