Kenyan Lawmakers set to borrow funds but is that the right thing for the nation economy??
Kenyan lawmakers has given the green light for the country to borrow US$4.1 billion (422 billion shillings) from external lenders. This fund will help the nation in term of expanding its economy by increasing public investment in infrastructure, manufacturing, education, health and energy.
During their met, they also approved the National Treasury’s proposed debt limit of 9 trillion shillings. This will be under a plan to present the nation’s level of debt as an absolute figure and not as a percentage of gross domestic product.
Kenya is in talks for a total of $4.1 billion in loans from lenders including the African Development Bank, China, Japan and the World Bank https://t.co/ZQtRrWZsAU
— Bloomberg Africa (@BBGAfrica) October 14, 2019
The negotiation is between Kenya and 15 lenders with the loan having 44 agreements. Meanwhile, the lenders includes; African Development Bank, China, Japan, World Bank and Agence Française de Développement. While South Korea, Germany KfW and International Fund for Agricultural Development are other recognized lenders.
However, Kenya present value of debts is at 60% of the GDP for this year, which is above the government limits of 50%. Document posted on the parliament website stated that ” The new ceiling provides adequate borrowing space to allow the government to access concession funding sources to facilitate government investment.”
This new ceiling will expands room to borrow by more than half of the nation’s debt. That’s forecast to reach 6.4 trillion shillings next year from 5.81 trillion shillings in June.
TABLE OF FUNDS TO BORROW AND LENDERS
Amount (billion shillings)
|African Development Bank||94.2|
|Agence Française de Développement||30.5|
|International Fund for Agricultural Development||12.4|