The amount, contained in EU’s 2018 to 2022 joint co-operation strategy, is an increase from the previous five-year deal of €3 billion (Sh346 billion) and will focus on President Uhuru Kenyatta’s ‘Big four Agenda.’
The agreement was signed between National Treasury Cabinet Secretary Henry Rotich and EU’s ambassador to Kenya Stefano Dejak.
Mr Rotich did not, however, disclose which proportion of the amount is loans and which one is grants.
Kenya has signed a five-year €4.5 billion (Sh520 billion) loans and grants deal with the European Union (EU), adding to the country’s debt load that now stands at Sh5.146 trillion.
The amount, contained in EU’s 2018 to 2022 joint co-operation strategy, is an increase from the previous five-year deal of €3 billion (Sh346 billion) and will focus on President Uhuru Kenyatta’s ‘Big four Agenda.’
“This agreement not only harmonises investment over a long period of time, it also aligns financial support with the priorities and objectives of the national government, such as the Government of Kenya's Medium Term Plan III and the Big Four agenda,” the EU said on Monday.
The agreement was signed between National Treasury Cabinet Secretary Henry Rotich and EU’s ambassador to Kenya Stefano Dejak.
Mr Rotich did not, however, disclose which proportion of the amount is loans and which one is grants.
The deals comes as growth in Kenya’s debt continues to raise concerns the ballooning repayment costs are hurting economic activities by taking up a large chunk of government revenue.
Kenya plans to spend Sh870.5 billion on debt repayments this year ending June next year from Sh435.7 billion the year ended June 2018 against expected taxes of Sh1.76 trillion.
The Jubilee administration has ramped up spending since 2013 to build much-needed new roads, a modern railway, bridges and electricity plants, driving up borrowing to plug the budget deficit.
The increased 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.
Public debt stood at Sh5.04 trillion in June 2018, up from Sh4.41 trillion in June 2017, Sh3.62 trillion in June 2016, Sh2.83 trillion in June 2015, Sh2.37 trillion in June 2014 and Sh1.89 trillion in June 2013.
“The support we have received will help the country in improving its economy. As you know, the country has many infrastructure deficit projects,” Mr Rotich said of the EU cash.
Mr Kenyatta’s 'Big Four Agenda' policy is aimed at boosting economic growth through spending, improving food security and rolling out universal healthcare, supporting manufacturing, and building affordable housing.
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