Running on the Wheels of Debts: Kenya Leads Other EAC Members Among Debtors to TDB

Kenya is leading other East African countries in terms of debts owed to the Trade and Development Bank with headquarters in Burundi.

According to stats from the bank, Kenya received 651.8 million dollars followed by Rwanda who pocketed 361.02 million dollars.

Uganda was given 226.83 million dollars while Tanzania took 191.67 million dollars. Burundi received the lowest amount, standing at 26.13 million dollars.

The member states have now rolled over the loans to more than 651.8 million dollars. The bank had issued a total of 2.62 billion dollars towards the funding of long-term projects to member countries. 1.65 billion dollars were approved by the board to be shared among the five EAC members.

Kenya took 250 million dollars in 2017 and expected to pay back 402.3 million dollars in a period of two years set to mature in July 2019.

Most of Kenya’s debts are set to mature in 2019, running to more than 2.2 billion dollars with 1.8 billion dollars maturing this year. In November 2017, Kenya took 750 million dollars from the Trade and Development Bank in form of ‘syndicated loan’ to pay off another loan that had been taken in 2015. It was a case of digging one hole to fill another hole.

Loans are taken from TDB often attract high-interest rates, 6.7 percent above the current six-month London Interbank Offer Rate.

Financial experts including bodies such as the International Monetary Fund (IMF) and World Bank have raised concerns about Kenya’s roaring appetite for loans saying that the country might not be able to pay back.

Kenya’s overall debt now stands at 5 trillion shillings with the National Treasury already seeking to hire 20 debt managers to help the country manage its debt and control its borrowing.

The IMF has called on the government to do away with duty-free on various products so as to widen its revenue collection net, a move that will see a liter of petrol retailing at 130 shillings from September.