Kenya took six new loans totalling Sh105 billion during the last four months of retired President Uhuru Kenyatta ’s administration for budget support towards economic recovery, fresh records by the National Treasury showed.
A document tabled in Parliament by former National Treasury Cabinet Secretary Ukur Yattani showed the debt was incurred between May 1, 2022, and August 31, 2022.
A breakdown of the loan amount, of which four are from multilateral lenders and one each from bilateral and commercial lenders, translates to Sh26.27 billion a month or Sh854.15 million a day for the four months.
The loan amount is, however, less compared to the Sh137.93 billion worth of the nine loans that the government procured between January 1, 2022, and April 30, 2022.
The loans are meant to support the Micro, Small and Medium Enterprises (MSMEs), the country’s development budget for the current financial year and the national agricultural value chain development project among others.
The National Treasury document shows that Kenya signed a Sh36.18 billion in the syndicated short-term multi-currency facility from Eastern and Southern African Trade Development Bank to fund Kenya’s development budget “including but not limited to” trade-related activities as approved by parliament for the 2022/23 financial year. The loan will be repaid in the form of a bullet repayment, a one-off payment, on September 30, 2025.
During the period, the government also procured Sh26.4 billion from the International Development Association (IDA) to increase market participation and value addition for targeted farmers in project areas.
Another Sh15.67 billion loan was taken from IDA to enhance pastoralists’ access to financial services for drought risk mitigation. The loan has a 1.25 per cent per annum interest fee and a service charge of 0.75 per cent per annum on the withdrawn credit balance.
The IDA loan to be repaid in Euros will also include the pastoral communities in the value chains and facilitate the livestock trade in the Horn of Africa.
The funds are aimed at strengthening the regional harmonisation, dissemination and use of core economic and social statistics for Kenya, Rwanda and Tanzania.
Kenya further signed a Sh10.5 billion loan from the African Development Bank (AfDB) to support a competitiveness and economic recovery support programme. The amount is for the general budget support programme to strengthen resilience and to support inclusive post-Covid-19 pandemic economic recovery through improved economic governance and enhanced industrial development and competitiveness.
Kenya additionally signed a Sh3.62 billion debt from the Khalifa fund for enterprise development to support MSMEs.
Currently, the country’s public debt stands at more than Sh8.6 trillion against the debt ceiling of Sh10 trillion, having grown from Sh1.8 trillion in 2013.
