Following an increase in disbursement and the shilling devaluation, Kenya’s World Bank debt surpassed has Ksh1.5 trillion ($9,99 billion) in June.
Kenya’s outstanding debt to the multilateral lender was Ksh1,57 trillion (US$10,45 billion) at the end of the fiscal year prior, from Ksh1.46 trillion (US$9,72 billion) at the end of May, according to new figures released by the Central Bank of Kenya.
With the Ksh110,9 billion (US$738,35 million) increase in only one month, the World Bank now holds over 60 percent of all outstanding debts to multilateral lenders.
The last month of the fiscal year saw fresh disbursements, which contributed to the steep increase in external debt. The devaluation of the local currency, which has dropped 17 percent since January, further hastened the depreciation.
“The Ksh309.4 billion (US$2,1 billion) increase in external loans is attributable to disbursements made during the month and depreciation against major currencies,” said Treasury in the release.
Based on available statistics, the World Bank, Eurobonds, China, and the African Development Bank account for 73 percent of the nation’s external debt, totaling Ksh3,97 trillion (US$26,4 billion).
The government is facing challenges in managing its high debt payment expenses due to its heightened reliance on these financial partners for fiscal support and infrastructure development.
According to Treasury projections, 38 percent of the entire debt payment expenditures for the current financial year would go to foreign lenders, bringing the total to a record Ksh1.62 trillion (US$10,8 billion).