Kenya has successfully secured approval for suspension of debt repayment for 32.9 billion shillings that was due within the next six months after the signing of a Memorandum of Understanding with the Paris Club.
Cabinet Secretary for the National Treasury and Planning, Ambassador Ukur Yatani, Monday confirmed Kenya’s successful application for the Debt Service Suspension Initiative (DSSI) from the Paris Club.
He noted that the debt owed to 10 bilateral partners was falling due between January and June this year will be paid at a later later agreeable with individual debtors.
“The Paris Club has accepted Kenya’s application for debt service suspension, which now means that Ksh 32.9 billion of Kenya’s foreign debt owed to 10 bilateral partners under the Paris Club, falling due from 1st January 2021 to 30th June, 2021”, he noted.
Apart from suspending repayments, the initiative will give Kenya five years to repay the loans as well as a grace period of one year.
Yattani said this would give the government the fiscal space to focus on the Covid-19 economic recovery strategy.
“In effect, the initiative apart from suspending the payments, will give us a total of five years to repay the loans, with a grace period of one year. This is not only timely, but a sign of confidence in the country and will give us the fiscal space to make the much needed spending on the Covid-19 economic recovery strategy especially in the social, health and economic sectors”, said Yatani.
Kenya has also applied for debt suspension of a further 40.6 billion shillings under the G-20 DSSI framework that is due during the first six months of this year.
The formal approval is expected in the coming weeks.
The country will not seek debt service suspension from both its multilateral and commercial creditors, to safeguard its sovereign rating and its future access to international financial markets.