The domestic debt service in January 2021, is estimated at Ksh159.9 billion, comprising Kh128.8 billion in maturing Treasury bills, Ksh31.12 billion in bonds, and Ksh15 billion in interest payments.
This is almost triple the payments for December 2020, which were at Ksh67.4 billion.
Financial analysts project that Treasury will have to pay more to unlock money from the domestic market to refinance the maturing debt.
Already, the government was unable to meet its target of Ksh600 billion from domestic borrowing in 2020 and it is expected that to meet its financing needs, it will borrow more in the coming months.
When it comes to domestic borrowing, the interest rates on short-term securities have risen in the past two months.
Kenya's debt has been a cause of concern especially with the maturing of the second SGR loan from China's Exim bank which amounts to Ksh162 billion.
Treasury revealed that the second phase of the SGR loan repayment would commence from January 21, 2021, in addition to the payments for the first loan for the Mombasa-Nairobi line which began in 2017.
As the loan repayments are scheduled to start, the overall payments to the bank will jump from the Ksh31 billion paid in the year to June 2019 to Ksh71.4 Billion in the current fiscal period.
Earlier in the week, the International Monetary Fund (IMF) warned that Kenya's debt pile-up risked the country losing access to cheap Eurobonds.
“The DSA (Debt Sustainability Assessment) suggests that Kenya is susceptible to export and market financing shocks and more prolonged and protracted shocks to the economy would also present downside risks to the debt outlook.
"Including from the continued potential loss of market access for frontier economies at reasonable prices, thus raising the probability that the debt indicators would remain in breach of the thresholds over time,” the IMF stated in its assessment report.
Treasury Cabinet Secretary Ukur Yatani had in December 2020 told Parliament that Kenya expects to return to the Eurobond market in 2024 to refinance Ksh130 billion maturing bonds it borrowed in 2014.
