Kenya’s debt level is not distressing at all and has left room for more borrowing, Treasury Cabinet Secretary Ukur Yatani has said.
This, Yatani said, allows Kenya to borrow Ksh1 trillion for the 2020/2021 financial year a move that will push Kenya’s debt to Ksh7.7 trillion.
“Kenya’s debt is sustainable, we are not feeling any distress. With revenue falling behind our projections and given the challenges of Covid-19 … as a responsible country we have the leeway to borrow and Kenya has never defaulted on any loan in history,” he said according to the Standard.
Yatani spoke on Friday during a grant aid signing ceremony with Japan.
He maintained that Kenya’s plan is to harness its revenue base with the view of funding her development projects.
The Treasury CS addressed the question of high interest charged on the loans it has acquired in the recent past.
He explained that Kenya has not taken commercial loans due to the high interest rates and has been taking concessional loans from bilateral countires.
The advantage of concessional loans, he said, is low interest rates and a longer repayment period of up to 30 years.
“For over a year now Kenya has not borrowed a commercial loan. We know the danger; the high interests rates, shorter maturity and the pressure on our exchequer to service it,” he said.
Global ratings agency Moody’s recently raised a red flag on Kenya’s debt level warning that soon, the country could sink into an abyss of financial crisis.
In May 2020, Kenya’s public debt hit Ksh6.6 trillion, a figure further ballooned by more borrowing to cushion Kenya’s economy from the aftershocks of coronavirus pandemic.