IMF, Exim Bank Among Top Holders of Kenya’s External Debt
Kenya has been facing a significant risk of debt distress, prompting the government to raise taxes in order to repay loans incurred primarily between 2013 and 2023.
Most of these loans were commercial, which meant they had high interest rates.
Meanwhile, the infrastructure projects built with the loans did not generate the expected revenue.
Kenya owes the International Development Association (IDA) Sh1.6 trillion, the Exim Bank of China Sh881 billion, Citigroup Global Markets Deutschland AG Sh562 billion, and Citigroup Global Markets Europe AG Sh436 billion of its nearly Sh10 trillion debt.
Kenya also owes the International Monetary Fund (IMF) Sh335 billion, the African Development Fund Sh314 billion, the Trade and Development Bank Sh217 billion, the African Development Bank Sh204 billion, and the International Bank for Reconstruction and Development—Sh152 billion.
The country also owes Sh 100 billion to Agence Francaise De Development and Sh 99 billion to the Government of Japan.
Kenya paid more than 10% on international bonds in February to have enough cash to cover the payment on a $2 billion Eurobond issued in 2014.
According to the Economist Intelligence Unit, Kenya’s debt dynamics shifted in 2020-2022 when it relied on concessional multilateral borrowing from the IMF, World Bank, and African Development Bank to deal with the COVID-19 pandemic.
Countries such as China, Japan, and France, as well as major commercial banks in Italy, Germany, and the United Kingdom, have reduced their lending to Kenya in recent years, citing the risk of lending to low-income countries as excessive.
IMF, Exim Bank Among Top Holders of Kenya’s External Debt
