Kenya’s foreign borrowing jumped 22.1 percent to Sh686.47 billion last year after the Treasury turned to the World Bank and the International Monetary Fund (IMF) for quick-disbursing credit facilities for the first time in more than a decade.
The elevated foreign borrowing, coupled with an 18.57 percent or Sh546.44 billion rise in domestic debt, pushed Kenya’s total new debt in a year past Sh1 trillion for the first time, statistics published by the Central Bank of Kenya show.
Kenya’s foreign borrowing jumped 22.1 percent to Sh686.47 billion last year after the Treasury turned to the World Bank and the International Monetary Fund (IMF) for quick-disbursing credit facilities for the first time in more than a decade.
The elevated foreign borrowing, coupled with an 18.57 percent or Sh546.44 billion rise in domestic debt, pushed Kenya’s total new debt in a year past Sh1 trillion for the first time, statistics published by the Central Bank of Kenya show.
Kenya’s debt from the IMF towards budgetary support nearly tripled between January and September 2020, jumping 190.33 percent to $1.047 billion (Sh115.33 billion) from $360.66 million (Sh39.73 billion) in December 2019, the latest creditor disclosures by the Treasury show.
Kenya had kept away from this type of credit, which come with demands for macroeconomic reforms, during administration of former President Mwai Kibaki, with most of the support from institutions like the IMF and the World Bank coming in the form of project support.
The country’s debt from the World Bank, on the other hand, rose 21.75 percent $8.81 billion (Sh970.21 billion) as the country turned to multilateral development lenders, whose facilities come with low interest rates and generous payment terms, to bridge gaping budget deficit.
Overall, debt stock increased by a record Sh1.23 trillion, or 20.4 percent, in the last calendar year to Sh7.28 trillion, a trend analysts say will persist in the coming years.
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