Kenya Warned By US Over Debt Repayment
Kenya is at risk of failing to meet its Vision 2030 goals due to its current outstanding debt.
According to the African Growth and Opportunity Act report by the Office of the United States Trade Representative, Kenya’s debt was undermining its development expenditure.
The office led by Ambassador Katherine Tai noted that the debt burden was exacerbated by the shilling’s perceived weakness.
“Kenya’s ability to adequately fund its social services and poverty reduction programs is increasingly constrained by the cost of servicing its debt, partly due to the continued weakening of the local currency.
“As a result, Kenya continues to allocate more money for debt repayment than it does for development expenditures,” read the statement in part.
Kenya’s total outstanding debt, both domestic and foreign, was Ksh10.4 trillion as of March 31.
Notably, the debt is almost equally distributed between foreign and domestic lenders, at Ksh5.16 trillion and Ksh5.26 trillion, respectively.
The vast majority of the debt is owed to commercial banks, foreign countries such as China, and multilateral institutions like the World Bank and the International Monetary Fund.
According to the Vision 2030 plan, Kenya should be a middle-income, industrialised country. Kenyans should have a high standard of living by then.
Meanwhile, the report highlighted other challenges facing Kenya, such as corruption.
Notably, corruption was identified as a major impediment for investors looking to set up shop in the country.
“The GOK continues its public campaign to combat corruption and its anticorruption agencies appear to be coordinating more effectively, including bringing cases against government officials.
“Despite progress, corruption remains one of the most significant barriers to doing business in Kenya, with U.S. firms reporting that they find it difficult to compete with companies willing to ignore legal standards or engage in bribery and other forms of corruption,” read the report in part.
Restrictions on free expression, peaceful assembly, and free media were also identified as obstacles.
Kenya Warned By US Over Debt Repayment
