President William Ruto’s government will borrow KSh 76.8 billion from international banks to plug the budget deficit despite promises to cut reliance on debt.
A statement by the National Treasury indicated the state was on course to cut KSh 300 billion from the 2022/2023 Budget.
It is said that the loan borrowed from CitiGroup, Rand Merchant Bank, Standard Chartered Bank and Standard Bank will hit the Central Bank of Kenya’s account in the next few weeks.
The loan is also expected to help shore up the CBK’s dwindling foreign reserves which currently stand at $6,605 million (3.69 months of import cover).
Sources noted the syndicated loan will be repaid in two phases, one in three years and another in five. “Short- to medium-term offerings is the most viable option for both the government of Kenya and the creditors,” a source said.
