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Kenya seeks $1B budgetary support from multilateral lenders

CBK Governor Dr. Kamau Thugge
CBK Governor Dr. Kamau Thugge. PHOTO | Cou

Kenya plans to borrow up to Ksh 148.5 billion ($1B) from international lenders before the end of this year to finance FY2023/24 budget.

Central Bank Governor (CBK) Dr. Kamau Thugge has said of the total amount, $500 million would be used to settle part of the $2 billion Eurobond that matures in June next year.

Channel 1

In an interview with Reuters on the sidelines of the World Bank and International Monetary Fund (IMF) meetings in Marrakech, Morocco, Thugge said Kenya is in talks with Trade and Development Bank and the African Export-Import Bank for the credit facility to be used to buy back part of the 2 billion dollars that is due in June2024.

“We would use part of that for the buyback, for the liability management, and the rest would be for the budget support,” said Thugge.

He said this is part of Kenya’s plan to progressively reduce the Eurobond debt.

If Kenya fails to secure loans from the institutions it is talks with, then the country’s foreign exchange reserves would be used to settle the Eurobond when it fall due.

Currently, the central bank has $6.91 billion of foreign exchange reserves, which is worth about 3.71 months of import cover.

In addition, the central bank governor said Kenya is in talks with the IMF for an augmentation of its loan programme, which is undergoing its sixth review next month, and with the World Bank to add to a $750 million loan planned for March next year.

Regina Manyara
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