Kenya is reportedly seeking a fresh $2.5 billion (Sh250 billion) Eurobond from the United States and Europe.
The East African reports that the government is planning to use the funds to finance part of its budget, service loans that have matured as well as complete stalled projects.
National Treasury officials are said to have flown to the US and Europe last week to seek the Eurobond, the country’s third in five years.
The publication reports that the Treasury officials began meeting investors on Thursday to market the bond which is being sold in two tranches of 12 and 31 years.
Kenya wants to service a $750 million (Sh75 billion) Eurobond priced at 5.875 percent that is due for repayment this June.
The government further seeks to finance its Sh2.7 trillion 2019/2020 national budget, which is expected to have a deficit of about Sh607.8 billion.
Experts, however, opine that Kenya might experience difficulties selling the new Eurobond following the International Monetary Fund’s decision to withdraw $1.5 billion (Sh150 billion) standby facility last year.
They say the withdrawal of the facility might scare away prospective investors.
If Kenya manages to secure the fresh Eurobond, the county’s public debt, which currently stands at Sh5.27 trillion, will further go up, thus putting more weight on the taxpayers’ shoulders.
The government plans to spend Sh551 billion of its 2019/2020 budget to repay debts.
Borrowing to service…
Borrowing to service existing loans is bad and it is equivalent to borrowing to consume. Retirement of existing loans should be paid from Kenya Government reserves and not from borrowing. Stop kicking the can down the road.
This is surely getting crazy…
This is surely getting crazy. We will be borrowing to pay interest rates on our loans thanks to the many fools who happen to be leaders in Kenya. Time for Wanjiku to wake up asilalie masikio tena. Some here keeps saying other countries are doing the same. Why do we have to follow the wrongs of other countries?
If China will not lend money…
If China will not lend money for a project how can investors agree to a bond ti finance recurrent expenditures and looting. These are junk bonds and Kenyans will pay deary. Worst president ever. 60yrs and no single individual achievement!!
It’s better that we don’t…
It’s better that we don’t receive anymore loans until we’re able to manage & service properly what we already have! We’ve been reduced to become a begging nation & it would be madness if we keep on getting loans which end up in politicians pockets every time we beg! Kibra MP Mr. Okoth,keep up what you’re doing!