Right now almost every Kenyan is in shreds financially, the public debt burden is ballooning everyday. Kenya is, as we speak, in advanced talks with the World Bank for $991.57 million (about Ksh 100 billion) loan.
On Friday, the government’s senior Treasury official said that the balance of the funds will be raised through Kenya’s first sovereign green bond.
According to Julius Muia, Principal Secretary at the National Treasury this year’s deficit will be covered through affordable loans. What about next year’s deficits and debts?
Right now, Kenya has huge foreign debts after Uhuru Kenyatta’s borrowing spree that has since left the country in a Eurobond offerings, a package of Chinese loans and syndicated commercial loans ditch.
The Washington D.C.-based financier lent money straight to the Kenyan ministry of finance for the first time last year, changing past practice where it channelled cash straight to the projects, bypassing the Treasury.
The size of the loan from the World Bank will be determined by how much its own funders can put together, said PS Muia.
“We are thinking something between 50-100 billion (shillings) depending on what kind of interest there will be,” he told Reuters.
Last year, the Senate gave the government the green light to raise Kenya’s debt ceiling to Sh9 trillion. They voted that the National Treasury can borrow up to Sh2.5 trillion, in addition to the current debt of Sh6.5 trillion.
This brought the indebtedness of every Kenyan to Sh189,218. The country has 47,564,296 people, according to the just-released census results. The government sought to raise the ceiling after it hit its limit, but needed to borrow more to pay some of the loans that will fall due in the coming 12 months.