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Treasury freezes plans for new eurobond after World Bank, IMF rescue 

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

Kenya is unlikely to float a new bond on the international market in the medium term after getting fresh funding commitments from multilateral lenders.

National Treasury Prof. Njuguna Ndung’u in a statement said the country’s financing strategy going will be to seek concessional funding as the bond market is currently unfavourable.

“Kenya’s financing Strategy going Forward
In light of the uncertainty surrounding access to global bond markets, the government
strategy has shifted to focus on seeking out concessional funding from the multilateral lenders
like IMF and the World Bank and bilateral development partners, in addition to stepping up
efforts to improve macroeconomic environment and carrying out the necessary structural
reforms,” said Ndung’u.

The announcement comes following fresh financing from the International Monetary Fund to the tune of Ksh 142.6 billion ($938m) under Extended Fund Facility (EFF) and Extended Credit Facility.

IMF commitment under the arrangements is expected to reach Ksh 673.4 billion ($4.43b) upon approval by the executive board.

On Monday, the World Bank also announced total commitment to the tune of Ksh 1.82 trillion ($12b) in the next three years from 2024 to 2026.

“Kenya will continue its efforts to access commercial financing when favorable market
conditions permit,” he added.

According to Treasury, the government has made great strides toward the budgetary adjustments
needed to alleviate debt concerns.

“This has been achieved by sustaining our efforts in revenue mobilization, reducing non-core spending while giving high-impact social and investment
expenditure priority,”

Kenya’s fiscal deficit is projected to decline from 5.6pc of Gross Domestic Product in FY2022/23 to 4.7pc in FY2023/24 and below 4pc in FY2024/25.

Prof. Ndung’u added that despite the liquidity challenges Kenya is facing, the macroeconomic environment remains stable, with real GDP projected to expand by 5.4pc in the first half of 2023, primarily due to a robust recovery in the agriculture and services sectors.

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