Kenya is seeking to defer $690 million in debt payments under the G20 debt relief initiative, taking a U-turn on its earlier stand against the initiative, earlier this year.
In April this year, Officials from the G20 countries (Group of 20 major economies) announced plans to suspend principal repayments and interest payments on loans for the world’s poorest countries. The waiver will last up to the end of the year.
According to the Saudi Finance Minister, Mohammed al-Jadaan, the suspension will thus release more than $20 billion for the underprivileged countries to use in fighting the COVID-19 pandemic.
However, Kenya distanced itself from the relief program, citing restrictive terms. According to Treasury CS Ukur Yattani, the program posed a risk to Kenya’s ability to finance its deficit later in the year.
“We have been reluctant in the past because of the attendant unintended consequences in terms of those holding private debt,” Finance Minister Ukur Yatani told Reuters.
Instead, he argued that Kenya was engaging creditors like Sweden, Germany, China, France, and Japan for a moratorium on instalments for at least a year.
The G20 is an international forum for the governments and central bank governors from 19 countries and the European Union (EU). The economies account for around 90% of the gross world product (GWP), two-thirds of the world population, 80% of world trade, and almost half of the world land area.