Kenya failed to meet KES 84.6 billion debt repayment obligations in the year to June due to a cash crunch and instead carried over the payments to the current fiscal year.
In its latest review of the progress on implementing projects under its 38-month credit scheme, the International Monetary Fund (IMF) said Kenya failed to pay 0.7 per cent of the country’s GDP to external creditors. The IMF did not make public the identity of the creditors.
The public debt rose to KES 8.6 trillion, adding more burden on service costs, with more than KES 945 billion used to pay domestic and external lenders in the 2021/22 financial year.
“A constrained borrowing environment meant that planned external commercial financing did not materialise. Lack of funds contributed to 0.7 per cent of GDP in unpaid obligations that were carried over to the 2022/23 financial year,” IMF stated.
According to data by the CBK, Kenya’s GDP was KES 12.0982 trillion by 2021
The IMF said while Kenya grew its tax revenue and cut budget deficits, the country’s debt pressures remained high.
The lender added that a mix of factors, including huge amounts spent on subsidising fuel, high inflation and disruptions in global supply chains, drained Kenya’s efforts on growing revenue and cutting the budget deficit.
“Significant unbudgeted spending in the early months of this fiscal year, much of it for fuel subsidies, posed an additional challenge. There has been progress on fiscal adjustment needed to address debt vulnerabilities though pressure remains elevated,” the lender said.
Read also; IMF Approves KES 52 Billion Credit Facility for Kenya.
