Kenya’s biggest bilateral lender China has announced that it is holding talks with the government for a possible debt service suspension.
The break would help Kenya recover from the economic knocks of Covid-19.
This comes just a week after the country received a Sh32.9 billion loan repayment holiday from the Paris Club of countries.
Kenya’s biggest bilateral lender China has announced that it is holding talks with the government for a possible debt service suspension.
The break would help Kenya recover from the economic knocks of Covid-19. This comes just a week after the country received a Sh32.9 billion loan repayment holiday from the Paris Club of countries.
Kenya is struggling with elevated debt payment which has spiralled to Sh7.1 trillion or 69.2 percent of the economy at a time when the pandemic has hit revenues. This year, the country is expected to pay Sh109.4 billion to China, including maturities of the second phase of the standard gauge railway to Naivasha.
A debt holiday, while allowing the funds to be channelled to areas that can prop up the economy and cushion those hard hit, also offers the country a window for deep reflection on future loan needs.
There is need to change tack on the infrastructure development that has seen the country develop a huge appetite for debt.
It is time to have a serious conversation on how to finance viable projects without having to take loans whose terms are not necessarily friendly.
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