Sh32 billion more piled on Kenya’s debt
Kenya’s debt continues to grow, with the latest information showing that the government borrowed at least Sh132 billion in the past seven months.
A document from the National Treasury tabled in the National Assembly shows the 13 loans were procured between September 30, 2019 and April 30, 2020.
Five of the loans are from a multilateral lender and eight from bilateral lenders.
Only one – Sh5.3 billion borrowed from the International Development Association – will go towards the Covid-19 emergency response plan, with the rest expected to finance other projects.
The Public Finance Management Act mandates the Treasury to periodically update Parliament on the country’s debt status.
But even as the government’s hunger for more loans grows, the International Monetary Fund (IMF) and the World Bank have issued warnings on repayment challenges.
Kenya’s public debt stood at Sh6.2 trillion in December.
With a Sh1.3 trillion gap in the 2020/21 financial year budget, it means the country’s debt continues to grow.
In May, the IMF raised Kenya’s risk of debt distress to high from moderate because of the Covid-19 pandemic.
Kenya’s debt was 61.7 per cent of GDP at the end of last year.
The percentage was 50.2 at the end of 2015.
In 2019, the World Bank warned Kenya against piling up more debt than it could repay.
It was the same year the National Assembly increased the country’s debt ceiling to a numerical figure of Sh9 trillion from 50 per cent of GDP.
About Sh25.3 billion sourced from the International Bank for Reconstruction and Development will go to affordable housing, one of President Uhuru Kenyatta’s flagship projects.
The loan was signed in December last year.
The affordable housing project is meant to support the Kenya Mortgage Refinancing Company and offer technical assistance to the Lands ministry and affiliated institutions.
The President promised to oversee the construction of 500,000 affordable housing units by 2022, when his second term ends.
However, only 218 units are being built in Park Road, Nairobi.
The government also borrowed Sh47.7 billion from the Japan International Cooperation Agency for the Mombasa gate bridge project.
The bridge is expected to provide a road connection between Mombasa island and the mainland.
The two are separated by the Likoni channel, which travellers cross on ferries.
Another Sh22.3 billion was acquired for the completion of the Thwake multipurpose water dam that has been under construction for about 10 years.
The money was sourced from the African Development Bank.
The project is expected to improve water storage and generate electricity for rural and urban consumption.
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