Kenya’s February domestic debt rose by Ksh 100 Billion to a total of Ksh 1.6 Trillion
Kenya’s domestic debt has surged to Kshs 1.623 Trillion (16 billion U.S. dollars) as of the end of February, a rise of about Ksh 100 Billion (1 billion dollars in February) as the government borrows more internally for budgetary support.
This comes at time when the Government through the Central Bank Of Kenya,, today said it will raise about Ksh 25 Billion for budgetary support via the 10-Year & 15-Year Treasury bonds.
At the end of January, the debt stood at 15.1 billion dollars before starting to rise steadily as the government floated several Treasury bonds and increased uptake of bids from Treasury bills.
The bonds floated in February are the five and 10 years securities whose interest rates stood at 14% and 14.3% respectively.
The bonds worth about Ksh 25 Billion (248 million dollars) attracted massive interest from investors raising more than double the amount.
The CBK received bids worth over Ksh 5.4 Billion (533 million dollars) and accepted 299 million dollars, about 50 million dollars more than the cash it had planned to raise.
More cash was raised through the sale of Treasury bills, where investors too have flocked as the apex bank accepts more bids than it had offered.
At the end of February, the CBK data showed that the high uptake of government securities had pushed up the domestic debt to 15.3 billion dollars before rising to the current level.
The surge pushes up total public debt, which stood at 30 billion dollars at the end of the year, with the external debt contributing 15 billion dollars of the amount.
Growth of external debt, according to the Central Bank, was due to increased disbursements from Exim Bank China, concessional loans from International Development Association (IDA) and exchange rate revaluation.
Domestic debt is expected to surge as government’s appetite for public cash grows.
In its Budget Policy Statement released last month, the Treasury revised down by 492 million dollars its domestic borrowing target to 1.7 billion dollars from 2.2 billion dollars.
With increased borrowing from domestic market, this target, noted analysts, may not be achieved.
– Xinhua,Kenyan Wallstreet
