The Kenyan Government is planning for another Eurobond amid the COVID-19 pandemic. This has resulted in a negative shift, which prompted a sharp rise in the prices of commodities.
The National Treasury has put in place the need for an onboard debt advisory team. This is according to the tender notice published on April 20, 2021. This advisory team has the mandate to fully manage Kenyan external debt.
The exchequer notice reads: “The main objective of the assignment is to provide liability management advisory services to the government of Kenya, through the National Treasury. This is to restructure some external commercial debt to lower costs and risks in the public debt portfolio. Also, it’s to improve debt sustainability.”
However, Kenyans have expressed their dissatisfaction following the decision of the government. They expect the advisory council to review the terms and conditions of her accrued debts and the risks associated with each loan or the commercial contract.
Another mandate granted to the advisory team will be to recommend different liability management and their operation. This is to improve already identified debts and provide remedial reforms.
Additionally, the news broke after the anticipated Eurobond loan by Kenyan Government seeks about Ksh 800 billion.
Nevertheless, a section of the citizens reportedly refuted the return to the Eurobond market after the IMF released its reports. According to the report, there was a total estimation of $7.3 billion, which is equivalent to Ksh 788.4 billion.
Different projects under the Jubilee administration are to gain from $2.3 billion. These projects are in the course of completion while others are being financed, calling for their commencement in due course.
However, another $5, which translates to Ksh 540 billion, will go for other projects. It will also channel to Eurobond the government had taken before, especially between 2014 to 2018.
Kenya has been trading in dangerous Zones. However, the International Monetary Fund (IMF) has granted the National Treasury an exemption to acquire other external loans.
Part of IMF’s statement reads: “While Kenya is at high risk of debt distress and subject to zero limits on non-concessional borrowing, the authorities have requested, and staff supports non-zero limit exceptions for project financing and debt management operations.“