Economy
Treasury Forms Advisory Team to Restructure External Loans
The Treasury on Tuesday issued a notice calling for experts to advise the country on the restructuring of external commercial loans, aimed at reducing the cost of these loans and improving Kenya’s debt sustainability. The experts will evaluate the best options available for Kenya to restructure its liabilities so as they remain sustainable. The measures might include cutting back on borrowing or getting cheaper loans.
“The government seeks to appoint a sovereign Debt Advisory firm to support the national treasury in debt liability management in respect of part of its commercial debt. The main objective of the assignment is to provide liability management advisory services to the government of Kenya to restructure some external commercial debts to lower costs and risk in the public debt portfolio and improve debt sustainability”, the notice read.
Last year, the government of Kenya obtained a bilateral debt repayment holiday worth Ksh 33 billion with the Paris club of international lenders and followed that up with a repayment moratorium worth Ksh 27 billion from China.
There are also plans by the government to borrow Ksh 937.6 billion for the 2021/2022 financial year to pay its budget deficit. Out of the total money, Ksh 345.5 billion will be borrowed from external sources. The total debt will be Ksh 846.8B comprising of Ksh 587.6 billion in interest payments and Ksh 259.2b in principle repayments.
The country has been facing a lot of protests from Kenyan citizens because of the level of borrowing that it has adapted. This move could serve as the 1st step in the country back-tracking on loan borrowing.
By Joy Ngoiri
