The Treasury has frozen loan guarantees and approvals for State corporations which have defaulted on repayment of debt and other statutory obligations, leaving many heavily-indebted public entities at the risk of collapse. Treasury secretary Ukur Yatani said State corporations in default of debt servicing and payments would be required to cut on operation costs and slow down on implementing new projects.
“The National Treasury and Planning will not give concurrence for borrowing or, where applicable, grant guarantees for State corporations which are in default of loan repayments and other statutory obligations,” he said in a circular to all Principal Secretaries and Chief Executive Officers of all State corporations and semi-autonomous agencies.
