A report by the Economist Intelligence Unit (EIU) has projected that the country will by all means necessary pay the Ksh322 billion (USD2 billion) Eurobond which is set to mature in June this year.
The Africa Outlook 2024 report released on January 18, explained that the government seeks to protect the reputation of the country given the financial consequences attached to defaults.
On the other hand, It was projected that the repayment may cause a headache for President William Ruto given the amount in question.
However, the EIU forecasted that the repayment would be manageable despite predictions that the economy may be affected after the repayment.
"Kenya’s biggest financial event in 2024 is the June 24 timeline to redeem a US 2 billion Eurobond in a single bullet payment, on top of other debt-servicing commitments. Using a combination of tactics, Kenya will strive to avoid a default and the consequent damage to its reputation and will prioritise a timely Eurobond redemption in 2024.
"The sum is large enough to generate legitimate concern, but not so large as to be unmanageable," read the report in part.
Ruto already pledged that the country would repay Ksh500 billion towards the Eurobond between December 2023 and January 2024.
Notably, he also cautioned Kenyans to prepare for tougher times given the fiscal strategies that will be implemented to help the country meet its debt obligations.
On the other hand, the intelligence report noted that Kenya would ease its fiscal demands should the Eurobond obligations be met.
"Provided Kenya clears the barrier in 2024, external debt pressures will ease, as the next Eurobond repayments (of US$1.9bn) are not due until 2027-28," the report added.
Notably, Kenya is one of the countries which is projected to lead the continent in economic growth. This was credited to the anticipated rebound of the tourism sector and the service industry.
"We forecast that Africa will be the world’s second-fastest-growing major region in 2024, just behind Asia, which will be propelled by China and India. East Africa, encompassing Ethiopia, Kenya, Uganda, Rwanda, Tanzania and the DRC, will once again prove to be the most dynamic part of the continent in terms of economic growth.
"The services sector will continue to play a major role in driving the economies of East Africa, including resurgent travel, tourism and hospitality, resilient transport and logistics, and vibrant financial and telecommunications industries," the report added.
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