Nairobi, Kenya Kenya has paid US$ 68.7 million in interest towards the US$ 2 billion Eurobond the country owes, equivalent to Ksh 10.8 billion.
In a statement, Treasury Cabinet Secretary Njuguna Ndung’u said the amount was a necessary installment, adding that the payment ‘underscores Kenya’s steadfast dedication to meeting external debt obligations with international lenders’.
Ndung’u added,
“The timely settlement of interest payment on the Eurobond has not only sent a positive signal to investors but has also resulted in a reduction in yields on Kenya’s Eurobonds in the global financial market.”
The final interest payment on the Eurobond is scheduled for the last week of June 2024, alongside the repayment of the principal amount of US$ 2 billion.
What is Eurobond?
As the Government Spokesperson Isaac Mwaura explains, Eurobond is money Kenya borrowed in 2014 from the European money market amounting to 2 billion US dollars (approximately Ksh 314 billion).
It is due for payment in June 2024. In a statement, Mwaura has said,
“Kenya borrowed short-term high-interest loans in the past when our economy was rebased in 2014…These short-term loans have been unsustainable.”
Future debt repayment
The spokesperson has added that the government has had a comprehensive plan for public debt management since July 2023.
He stated,
“Debt servicing shall thus be done through a mixture of revenue raised locally and concessional financing to do away with short-term debts which have very high interest rates.”
He also explained,
“Through President Ruto’s engagement internationally, he has been able to secure financing from the World Bank, IMF, Africa Development Bank, and other bilateral partners. The new financing will increase our foreign reserve levels beginning January to March 2024.”
This comes as Ethiopia defaulted on its $33 million Eurobond repayment, citing financial strain due to the Covid-19 pandemic and a two-year civil war that ended in November last year.
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