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Kenya’s Treasury has affirmed its commitment to meeting all debt obligations related to the $2 billion Eurobond, which matures in July 2024. The country recently made a payment of $68.7 million (Ksh10.8 billion) in interest, abandoning its initial plan for a $300 million buyback.
In a statement, CS National Treasury Njuguna Ndung’u emphasized Kenya’s dedication to fulfilling its debt obligations with international lenders. The payment, funded through prudent revenue utilization, highlights Kenya’s steadfast commitment to meeting external obligations.
Ndung’u announced that the state intends to pay the final interest payment scheduled for the last week of June 2024, along with the repayment of the principal amount of $2 billion. He noted that the timely settlement of interest payments has sent a positive signal to investors, resulting in a reduction in yields on Kenya’s Eurobonds in global financial markets.
Since July 2023, the government has diligently implemented a comprehensive plan for debt service payments, combining revenue and concessional financing to retire high-cost debts within the national debt portfolio.
The CS also anticipates substantial external inflows from the World Bank, IMF, and other development finance institutions, as well as key bilateral partners between January and March 2024, which will significantly boost exchange reserve levels.
Ndung’u praised the government’s tax policy and administrative reforms for their impact on revenue collection. Despite a slow start in revenue collection at the beginning of the fiscal year, the preliminary outcome for the six months ending December reflects an impressive turnaround.
According to the Treasury, Kenya’s robust economic outlook is supported by policy reforms and collaborations with multilateral and bilateral development partners. The ongoing fiscal consolidation plan, driven by revenue generation, aims to curtail borrowing, reduce debt levels over the medium term, and enhance the well-being of Kenyans.
Kenya met the December 24 deadline for the payment on the 10-year bond, priced at 6.78%, issued in 2014 to fund infrastructure projects under the former Jubilee administration.
