Kenya will to settle the first installment of the $2 billion Eurobond which matures in June 2024 by December this year, President William Ruto has said.
The 10-year syndicated loans floated in 2014 has been a key focus the country’s policymakers as Kenya battles heavy public debt load with a risk of falling into default.
While giving his inaugural State of the National Address to the bicameral sitting Thursday, President Ruto said his administration has been able to marshal support from bilateral development partners, multilateral development banks and other agencies in order to raise funds to service the debt and avoid debt distress.
“Our efforts to stabilise the situation have yielded such progress that next month, in December, we will be able to settle the first $300 million (Ksh 45.3b) installment of the $2 billion Eurobond debt that falls due next year. I can now state with confidence that we will and shall pay the debt that has become a source of much concern to citizens, markets and partners,” said President Ruto.
The news could lift Kenya’s credit image which has been eroded by the risk of default amid rising public debt which has according to the Central Bank of Kenya, had reached Ksh 10.5 trillion by end of August this year.
According to President Ruto, the government’s debt appetite especially in the domestic market had crowded out private sector a factor that has led to high cost of credit which has also held back trade and commerce in the country.
“We must admit honorable members, that as a country, we had been living large and way beyond our means. The time has come therefore, to retire the false comforts and illusionary benefits of wasteful expenditure and counterproductive subsidies on consumption by which we dug ourselves deeper into the hole of avoidable debt,” he added.
The payment of the first installment is also expected to repair the country’s image with multilateral lenders such as the International Monetary Fund (IMF), World Bank, the Africa Development Bank (AfDB).
