Kenya's request for debt service suspension has been approved by the Paris Club of major economies.
“The Paris Club creditors have accepted to provide to the Republic of Kenya a time-bound suspension of debt service due from 1st January to 30th June 2021,” the G20 group of rich nations said in a statement.
The deferred repayment gives Kenya around Sh32.9 billion in potential savings for the six-month period.
Kenya was committed to channel the cash freed by the initiative to mitigate the health, economic, and social impact of the Covid-19 crisis, the Paris Club said.
Kenya was also committed to seek from other bilateral official creditors a debt service treatment that is in line with the agreed terms of the Debt Service Suspension Initiative (DSSI) of the G20.
The piling public debt has seen Kenya commit more than half of taxes to paying loans, leaving little cash for building roads, affordable housing and revamping of the ailing health sector.