Kenya Defaulting China Loans Are False Claims Says Treasury

This comes as a result of a trending story in the daily local news on October 13 that the country has been fined Sh1.312 billion by Chinese banks in the year ended June for loan defaults.

“We wish to state categorically, that Kenya has never defaulted on the settlement of its debt service obligations to any of its creditors, nor has any creditor filed or reported any claim of default on debt service payments on facilities extended to the Government of Kenya,” said Treasury CS, Ukur Yatani

Further, Yatani noted that Kenya has not accumulated any debt arrears in decades to stipulate difficulties in debt servicing.

“As a country accessing international financial markets to raise resources, Kenya undergoes frequent independent sovereign rating reviews whose outcomes are published widely. At no time has Kenya been flagged as a country defaulting on its external debt obligations,” Yatani said.

Meanwhile, the Treasury mentioned that all public debt, including the SGR loans, are paid from the Consolidated Fund in accordance with the Public Finance Management Act, 2012.

Debt service is a first charge on the Consolidated Fund and takes precedence over other forms of expenditure.

“We want to assure our creditors, development partners, investors, and the general public that Kenya’s financial position is sound and robust,” Yatani stated.

The Treasury plead with the local daily to restrain itself from misinformation, with the prospective of harming the country’s reputation in the international financial markets.