Home NEWS Local News Treasury assures it will not default on repayment of $2 billion Eurobond

Treasury assures it will not default on repayment of $2 billion Eurobond

National Treasury and Economic Planning Prof. Njuguna Ndung'u. PHOTO | File

Kenya says it has made a payment of $68.7 million (Ksh10.8B) in interest due on the US$2 billion Eurobond that matures in July 2024 ditching its initial plan for a US$300 million buyback.

In a statement on Thursday, CS National Treasury Njuguna Ndung’u said Kenya remains dedicated to fulfilling all debt obligations with international lenders.

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“This financial commitment, achieved through the prudent use of revenue collections, underscores Kenya’s steadfast dedication to meeting external obligations,” he said.

At the same time, Ndung’u noted that the state plans to pay the final interest payment scheduled for the last week of June 2024, alongside the repayment of the principal amount of US$2 billion.

“The timely settlement of interest payments on the Eurobond has not only sent a positive signal to investors but also resulted in reduction in yields on Kenya’s Eurobonds in the global financial markets,” Ndung’u noted.

“Since July 2023, the government has diligently implemented a comprehensive plan for debt service payments, combining revenue and concessional financing to retire high-cost debts within the national debt portfolio,” the statement added.

The CS also revealed that substantial external inflows from the World Bank, IMF, and other development finance institutions, in addition to key bilateral partners, are anticipated between January and March 2014.

“These inflows are poised to significantly bolster exchange reserve levels.

He also lauded the government’s tax policy and administrative reforms for the impact it has had on revenue collection.

“Additionally, after a slow start in revenue collection at the fiscal year’s commencement, the preliminary outcome for the six months ending December reflects an impressive turnaround. This positive shift is attributed to the government’s tax policy and administrative reforms,” it added.

According to the Treasury, Kenya has maintained a robust economic outlook that is supported by policy reforms and collaborations with multilateral and bilateral development partners.

“ The ongoing fiscal consolidation plan, driven by revenue generation, aims to curtail borrowing, reduce debt levels over the medium term, and ultimately enhance the well-being of Kenyans, ’he added.

Kenya had until December 24 to make the payment for the debt.

The 10-year bond priced at 6.78 percent was issued in 2014 to fund infrastructure projects under the former Jubilee administration.

 

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