The National Treasury want to hire the services of a debt advisory firm as it plans to return to the bond market, seeking to raise a loan worth Ksh124 billion in 2021.
In a tender notice dated Tuesday, April 20, the Treasury said that the advisory firm will support the government in managing its external debt and balancing its books.
The financial institution will review Kenya's terms and services of loan arrangements for external commercial debts and loan contracts. It will also advise the Treasury on liability management options to improve the present value of identified debts.
Kenya is seeking to secure a new Eurobond loan before July 2021. The country secured its first Ksh200 billion Eurobond in 2014 and a second one at Ksh75 billion in the same year.
The third Ksh200 billion Eurobond which was channelled towards servicing debt and development projects was secured in February 2018. The office of the Auditor General, however, raised concerns over the loans, saying that receipts and spending of Ksh215.5 billion Eurobond were unaccounted for.
Opposition leaders, led by ODM leader Raila Odinga, further alleged that the funds were embezzled by senior government officials.
Plans to secure the new loan come a few weeks after Kenyans protested a Ksh 255 billion International Monetary Fund (IMF) loan granted to Kenya. The uproar forced IMF to outline strict conditions to the government.
This included enforcing wealth declarations for all public servants in the quest to curb corruption, ensuring all companies submit accurate, complete and updated beneficial ownership information to the Registrar of Companies and the restructuring of parastatals to cut down expenditure or ensure existing parastatals generate profit rather than run on losses.
The government is also in discussions with the World Bank over a new Ksh82 billion loan that would be used to service debts. The Treasury hopes to secure the loan by June 2021.
It further supported the push for the International Monetary Fund to increase Special Drawing Rights(SDR) limits to solve the country's debt crisis. If successful, the new proposal would allow Kenya to print more cash for circulation - without diluting the local currency.
Kenya's debt is expected to rise to Ksh 7.66 trillion from Ksh 6.69 trillion by June 30, the end of the financial year 2020/21 and Ksh 8.59 trillion in June 2022 and Ksh 9.37 trillion by mid-2023.
Treasury is further seeking to raise the debt ceiling past Ksh 9 trillion. President Uhuru Kenyatta said that his government was keen on completing its development agenda and aside from securing loans, he urged Kenyans to pay taxes without lamentations.
"I will not lower taxes. You will have to pay because there is no other way we can build facilities, roads, and schools. We must pay taxes. The only thing we can do is making the remittance of taxes easier to avoid stalling business," Uhuru declared on Wednesday, February 10, while speaking at the National Cargo Deconsolidation Centre in Nairobi.
