President William Ruto’s administration has inched closer to inking a Ksh153 billion (USD1 billion) loan from China.
According to the Central Bank of Kenya, the money which will be disbursed early next year will partly be used to repay the Ksh300 billion Eurobond maturing in June 2024.
CBK revealed that Kenya was actively engaging the Chinese Government concerning the loan, a move expected to boost foreign exchange reserves.
"The timing is yet to be ascertained but we were to get it before June 2024. It could be used to address the maturity of the Eurobond,” CBK Governor Kamau Thugge remarked as quoted by Reuters.
With the country’s debt nearing the Ksh11 trillion mark, there have been worries that Kenya could default on its international obligations.
Recent loans from the World Bank and International Monetary Fund coupled with the expected Ksh153 billion loan from China are set to ensure that Kenya clears the debt it incurred in 2014.
In May, Kenya received a Ksh153 billion (USD1 billion) loan from the World Bank and in November, it received an almost similar amount from the IMF.
During a State of the Nation Address from Parliament on November 9, President William Ruto had promised to pay half of the Eurobond in December 2023, six months before its maturity date.
"I can now confirm with confidence that we will and we shall pay the debt that has become a source of much concern to citizens and markets," he stated at the time promising that the rest of the amount would be serviced by a loan from China.
Kenya took the Eurobond in 2014 under former President Uhuru Kenyatta to support infrastructural and development projects.
At the time, Kenya was anticipated to pay Ksh170 billion but due to depreciation of the Kenyan Shilling against the dollar, the amount has risen to over Ksh300 billion.
President Ruto travelled to China on October 18 to set in motion the negotiations for the loan which will also partly be used to complete stalled infrastructure projects.
