National Treasury Cabinet Secretary Ukur Yatani said that the Kenyan government is set to take another Eurobond loan amounting to Ksh124 billion.
Yatani, who replaced former CS Henry Rotich in July, 2019, has stayed away from international commercial loans since he took the office.
The borrowing has resulted from an increase in the commercial financing shares that the government had projected would be manageable until June.
Following the over 5,000 increase in these shares, the Treasury has expanded the limit for outsourced finances for commercial purpose to Ksh350.5 billion which is an increase from the initial Ksh 6.2 billion.
Kenya’s fourth Eurobond comes at a time when the CS has successfully tried to depend on loans that have favourable terms.
Yatani has in the past preferred cheaper finance options to restore Kenyan’s trust in the Treasury, an institution that has struggled to shed off the corruption tag.
Reports indicate that the cheaper loans that the government was targeting have been exhausted completely leaving a shortfall of the Ksh124 billion to be borrowed.
The CS also made several efforts of cutting down financial allocations for government foreign travels as well as the usually refreshment budgets in Ministries and State Departments (MDAs).
Fiscal consolidation is nevertheless yet to bear fruit pulled down in part by the COVID-19 pandemic which left the exchequer with shallow tax revenues.
The exchequer has further reduced disbursement expected from the African Development Bank (AfDB) by over Ksh 37 billion thus warranting the need for another financial source.
Though the government is still hoping to get Ksh 78.8 billion from the IMF Rapid Credit Facility (RCF) and another Ksh 82.5 billion from the World Bank Development Policy Operations (DPO), Kenyans should be on the lookout for external loans announcement before the end of the 2020/2021 financial year.
The National Treasury data indicate that Kenya’s public debt will have rose to Ksh 7.6 billion by end of June.
Financial experts have argued that Uhuru’s term will end with huge debts that the coming government will find it challenging to handle.
In 2019, the world bank warned Kenya over its public debt which was standing at 62% thus overwhelming the gross domestic income.
By the end of 2020, Kenya had added Ksh1.2 trillion to its debt in only one year.