Kenya runs on the wheels of debts. The country has borrowed so much that the future generations will keep on paying what the current generation has consumed.
As the country struggles under the burden of debts with lenders asking for their money back, the Treasury has opted to open the third Eurobond in five years “to pay off debts and finance the budget” for the 2019/2020 financial year.
The new Eurobond will be sold in tow folds of 7-year and 12-year with both the JP Morgan and Standard Chartered Bank being the lead arrangers.
The National Treasury has remained mute over how much it plans to raise but the Business Daily newspaper quotes the amount at 250 billion shillings.
Controversy still surrounds how Kenya used the first two Eurobonds with more than 100 billion shillings said to be unaccounted for.
A Country Choking with Debts
Last month, it emerged that the National Treasury has been borrowing an average of 2.1 billion shillings per day.
Stats released by the Central Bank of Kenya (CBK) indicate that between the month of January and February 2019, the Treasury borrowed 126.4 billion shillings.
Kenya’s public debt now stands at 5.4 trillion shillings with analysts estimating that it is likely to hit the 6.2 trillion mark in the course of the year.
Domestic debt has ballooned to 142.6 billion shillings to 2.692 trillion shillings in two months while the external debts have dipped slightly by 22 billion shillings to 2.707 trillion shillings.
The Kenyan government has been using 1.94 billion shillings daily to service both domestic and external debts signaling tough times ahead for the already squeezed taxpayer. Debt payment spiked by 75 percent in a period of nine months to March 2019.
In nine months to March, the Treasury used 538.20 billion shillings to pay off debts. This was a sharp rise from 273.64 billion shillings recorded during a similar period in 2018