Kenya plans to replace its current commercial debt with cheaper debt from development financiers and ally nations, according to the acting Head of the National Treasury, Ukur Yatani. This aims to lower the high level of public debt which rose to 62% of the GDP in the past year.
There have been repeated warnings of mounting debt from the IMF and economists. The debt hit an all time high of KSh6 trillion in 2019. The Kenyan Government is determined to lower the government debt to manageable levels.
However, the need to finance projects in healthcare, manufacturing, agriculture, and housing is expected to push the level of national debt upward. These projects are necessary to maintain an economic growth rate above 5%.
Public debt is expected to reach KSh6.7 trillion by the end of this year.
Since taking office in July 2019, the acting Minister of Finance, Dr. Ukur Yatani, has made changes aimed at reducing government expenditure. Some of the reforms are; limiting foreign trips for public officials as well as cutting expenditure on the international travels.
In an opinion piece published in the Daily Nation, Dr. Ukur Yattani revealed that the government intends to refinance the commercial loans with affordable concessionary debt.