A report tabled in the National Assembly has revealed that President William Ruto’s administration acquired external loans amounting to Ksh68 billion between September and December last year.
The reports submitted to Parliament by the National Treasury on Thursday, February 13, revealed that most of these loans were taken to bridge the budget deficit and facilitate infrastructure development in the country.
The largest loan the government acquired during the year’s final quarter was a credit facility from Italy worth Ksh20 billion. The multi-billion loan, acquired on October 14, is set to be repaid in 27 instalments, with the last tranche due in 2045.
According to the report, the main purpose of the loan was to help Kenya achieve its climate action goals and reduce greenhouse gas emissions.
Treasury Cabinet John Mbadi during a past media engagement at Treasury Buildings in Nairobi.
Treasury
During the same period, the government acquired a Ksh8 billion loan from the government of Germany. This was the second-largest credit facility taken in the final quarter of last year.
The loan, which attracts an annual interest of 1.2 per cent, will be repaid in 27 equal instalments from November 15, 2029, to November 15, 2042. The purpose of the loan was to help the country transition to a greener and more inclusive economy.
On October 3, the government acquired its third-largest loan, worth Ksh4.8 billion, from the French Government. The credit facility is set to be repaid in 30 equal instalments from July 15, 2030, to January 15, 2045.
The credit facility, which attracts an interest rate of 0.883 per cent annually, was acquired to finance the construction of a stable national system control centre that is also resilient to physical and cybersecurity challenges.
Another loan acquired by the government was from the China Development Bank. The Ksh4.5 billion loan was the fourth-largest taken during the same period. It is set to be repaid in eight instalments from October 15, 2027, to April 15, 2031.
During the same period, the government also took another Ksh3.9 billion loan from the China Development Bank. The facility, which is set to be repaid in instalments from 2027 to 2031, was meant for the construction of roads in the country.
The same bank also granted Kenya another loan worth Ksh2.79 billion, with an annual interest rate of 4.0 per cent. Like the other loans, the funds were allocated for road construction.
Section 31 of the Public Finance Management Act mandates the Treasury Cabinet Secretary to occasionally submit a report to Parliament stating the loan balances brought forward, carried down and amortizations on new loans obtained by the country.
The National Treasury building in Nairobi County.
Photo
National Treasury