Kenya has hinted at scrapping a plan to sell $1 billion of Eurobonds by the end of June this year, citing rising yields globally that will make the borrowing expensive.
The nation raised $1 billion in 12-year debt in June last year at 6.3%, in an issue that was five times oversubscribed.
The IMF classifies Kenya’s debt at high risk of becoming distressed and estimates the burden could rise to 71.2% of gross domestic product by the end of this year. To return to a more sustainable path, Kenya says it is pivoting away from commercial borrowing to concessional loans.
As Bloomberg reports, the switch to concessional loans could cap the ceiling at between 55% to 70% of GDP.
The International Monetary Fund (IMF) staff has this week also reached an agreement to advance a KSh28 billion loan to Kenya as part of the 38-month IMF’s Extended Fund Facility (EFF) and Extended Credit Facility (ECF) financed program.
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