
David Ndii Reveals What Could Happen If Kenya Defaults On Loans
President William Ruto’s economic adviser, David Ndii, has warned of a severe recession if the country fails to meet its debt obligations.
In response to Kenyans’ questions about X, Ndii stated that there would be consequences if Kenya failed to meet its obligations despite the tough economic times.
A deep recession is a period of economic downturn marked by widespread job losses, increased unemployment, and an increase in consumer goods.
“You must tell them to be realistic. What’s the worst if we default?” Mutisya Willy stated.
“A deep recession,” Ndii responded.
Here is something you should know. To restructure your debts, you must have an IMF programme. The IMF/World Bank co-chair the process. So its either an IMF programme you negotiate or one imposed by creditors https://t.co/y8rhdYC0V2 https://t.co/2JNFy5mJ3f
— David Ndii (@DavidNdii) June 28, 2024
Kenya’s total outstanding debt as of March 31, 2024, was Ksh10.4 trillion, including domestic and foreign debts.
However, domestic debts account for the majority of the debt portfolio.
You must tell them to be realistic… What's the worst if we default..
— mutisya willy (@mutipat) June 28, 2024
The country owes domestic lenders such as banks Ksh5.26 trillion and external lenders Ksh5.16 trillion.
According to the Office of the Controller of Budget, the strengthening of the shilling has helped to reduce the debt portfolio to Ksh1 trillion.
“Public debt increased 1 per cent from Ksh10.28 trillion as of June 30, 2023, to Ksh11.14 trillion as of December 31, 2023 and reduced to Ksh10.42 trillion as of March 31, 2024.
“Between December 31, 2023, and March 31, 2024, external debt decreased by 15.2 per cent, while domestic debt increased by 9 per cent. This decrease in external debt is due to the strengthening of the Kenyan Shilling against major foreign currencies,” the CoB noted in its budget.
The majority of external debt is owed to countries like China, as well as multinational lenders like the World Bank and the International Monetary Fund (IMF).
Notably, Kenya has already read the USD 2 billion Eurobond, which was due next month.
President William Ruto, on the other hand, has assured that the government will meet all of its debt obligations, which is why he wants Kenya to generate its own revenue.
David Ndii Reveals What Could Happen If Kenya Defaults On Loans