In a bid to bolster the country’s foreign exchange reserves ahead of Eurobond’s maturity in June 2024, Kenya has successfully secured another loan of Ksh33 billion from the Trade and Development Bank (TDB).
This forms part of a series of loans the country is expected to secure from the Pan-African bank. Last year, the Central Bank Governor Kamau Thugge disclosed the country was expected to secure about Ksh47 billion from TDB within the 23/24 financial year.
According to Thugge, a large share of the money would be used in servicing the Ksh323 billion (USD2 billion) Eurobond set to mature in June this year.
The current Eurobond set for maturity this year is an amount of money that was borrowed by Kenya in 2014 from the European money market and Kenya was obligated to service it after a time lapse period of ten years.
CBK Governor Kamau Thugge addressing a Monetary Policy Committee (MPC) meeting on June 27, 2023.
In December last year, Kenya settled about Ksh10 billion (USSD68.7 million) accrued interests on the Eurobond. Treasury Cabinet Secretary Njuguna Ndung’u noted the country remains dedicated to fulfilling all debt obligations with international lenders.
The move to secure more capitation from TDB comes a day after the state acquired Ksh150 billion from the International Monetary Fund (IMF).
According to the IMF, the money was meant to maintain macroeconomic stability, strengthen debt sustainability, and prevent the country from financial shocks.
“The Kenyan economy remains resilient against a challenging global backdrop even as it recovers from the legacy of the COVID-19 pandemic and the worst multi-season drought over the past two years,” IMF noted in a statement.
The money would also be used to fund climate change policies and also help in the country’s preparedness for pandemics.
The loan disbursement pushes the total amount of money secured from the Washington-based financial agency to Ksh427 billion.
Kenya has been making incredible strides in debt repayment, an affair which has set it apart from its neighbours like Ethiopia which failed to fulfil its debt obligations.
President William Ruto has on various occasions given assurance that the government is committed to honouring all the country’s debt obligations and that he has formulated measures to help manage and balance the nation’s rate of borrowing and debt repayment.
President William Ruto speaking during the 10th Inter-Governmental Summit held at State House, Nairobi on December 18, 2023.