Debt burden mounts as Treasury borrows Sh430bn in 5 months
- In the five months to June, the Treasury signed a total of 29 new loans involving bilateral, multilateral and commercial creditors.
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Kenya borrowed Sh430.6 billion in the five months to June, highlighting the Jubilee administrationâs appetite for foreign money to finance mega infrastructure projects.
The Treasury signed a total of 29 new loans involving bilateral, multilateral and commercial creditors.
âThe proceeds from all the facilities (Sh430.6 billion) are expected to finance development projects to achieve the countryâs development agenda,â said Treasury secretary Henry Rotich in a report to Parliament on all new loans contracted by the governm ent from February 1 to June 30, 2017.
âThe funds are mainly to fund infrastructure projects including roads, irrigated water and water supply, energy, health and education.â
Kenya has ramped up spending in recent years to build a modern railway, new roads and electricity plants, driving up the budget deficit.
The World Bank recently warned that the countryâs growing appetite for loans, especially Chinese debt, risks hurting the economy.
READ: Huge debt aside, economy will grow, say experts
The country contracted Sh146.9 billion syndicated loan facilities from Citi Bank and PTA Bank for budgetary support in funding of infrastructure development.
Mr Rotich said majority of the creditors are bilateral while others are multilateral and commercial.
The report, tabled by the National Assembly Leader of Majority Aden Duale, shows that out of the Sh430.6 billion of the new loans, Sh156 billion from two commercial creditors have been disbursed.
The Sh156 billion was secured from PTA Bank and a consortium of lenders comprising Standard Chartered Bank, Citi Bank and Rand Merchant Bank.
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