Kenya is looking to receive up to Sh100 billion in syndicated loans by end of March as it moves to patch up the current financial year’s budget deficit ahead of the General Election, Treasury PS Kamau Thugge has said.
Dr Thugge said the process could be finalised in the next two months.
“We are in the process of getting that additional funding and we should be able to receive it shortly before end of this financial year, hopefully by March,” he told the National Assembly’s Finance Committee yesterday.
Receipt of the loans is expected to raise Kenya’s stock of public debt but also exert a downward pressure on the shilling which has been sliding against major foreign currencies for some time now.
Data from the Treasury tabled in Parliament last month showed Kenya’s total public debt hit Sh3.6 trillion in the year ending June 2016. This was a rise of about 27 per cent from the Sh2.8 trillion recorded at the end of June 2015.
The report showed that domestic and external debt account for 50.3 per cent and 49.7 per cent of the Sh3.61 trillion respectively.
Yesterday, Dr Thugge told MPs the current debt was sustainable owing to the fiscal actions that the Treasury had put in place. Overall, the debt is roughly between 53 and 54 per cent of the Gross Domestic Product (GDP) currently estimated to be about Sh7.5 trillion, Dr Thuge said.
“Our total debt (is) somewhere around Sh3.5 trillion. In our view this is a sustainable debt based on all the debt sustainability analyses that we have done and that has been done by the World Bank as well as the International Monetary Fund,” he said.