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CS Njuguna Ndung’u affirms Kenya’s commitment to servicing international debts

Treasury Cabinet Secretary Prof. Njuguna Ndung'u.

By Patel Okumu | Thursday, December 28, 2023

In a resolute move to maintain a robust sovereign credit rating and facilitate access to new development financing, Kenya has reaffirmed its unwavering commitment to meeting all debt obligations.

In a resolute move to maintain a robust sovereign credit rating and facilitate access to new development financing, Kenya has reaffirmed its unwavering commitment to meeting all debt obligations with international lenders, according to an official statement released by Cabinet Secretary Prof. Njuguna Ndung’u.

Kenya recently demonstrated its financial commitment by successfully executing a payment of Usd68.7 million (equivalent to Sh10.8 billion) in interest, representing a crucial installment on the Usd2 billion Eurobond. This accomplishment, achieved through the prudent use of revenue collections, serves as a testament to Kenya's dedication to meeting external obligations.

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The timely settlement of interest payments on the Eurobond not only sends a positive signal to investors but has also led to a reduction in yields on Kenya's Eurobonds in the global financial markets. The final interest payment on this Eurobond is slated for the last week of June 2024, aligning with the repayment of the principal amount of Usd2 billion.

Since July 2023, the government has diligently implemented a comprehensive plan for debt service payments, utilizing revenue and concessional financing to retire high-cost debts within the national debt portfolio.

Anticipated substantial external inflows from the World Bank, IMF, and other Development Finance Institutions, along with key bilateral partners, are expected between January and March 2024. These inflows are poised to significantly bolster foreign exchange reserve levels.

Despite a slow start in revenue collection at the fiscal year's commencement, the preliminary outcome for the six months ending December reflects an impressive turnaround. This positive shift is attributed to the government's tax policy and administrative reforms.

Cabinet Secretary Prof. Njuguna Ndung'u emphasized that Kenya maintains a robust economic outlook supported by policy reforms and collaborations with multilateral and bilateral development partners. The ongoing fiscal consolidation plan, driven by revenue generation, aims to curtail borrowing, reduce debt levels over the medium term, and ultimately enhance the well-being of Kenyans.