We are truly in the middle of a debt trap. In an interview with Reuters this week, Treasury secretary Henry Rotich disclosed that Kenya has no choice than to issue a Eurobond to repay a $750 million (Sh77 billion) loan, which the government contracted from a syndicate of banks in October 2015. We are in a situation where the government has now resorted to borrowing from Peter to pay Paul.
I must say that I found some of the statements made by the minister in the interview revealing. First, he disclosed that even though the $750 million syndicated loan was due on October this year, the government had been forced to negotiate with bond holders to extend the maturity by six months to April 2018.
