NAIROBI, Kenya, Feb 27 – The government plans to settle the remaining $500 million Eurobond balance by tapping into taxes collected by the Kenya Revenue Authority (KRA).
After servicing $1.5 billion through buyback recently, Treasury Principal Secretary (PS) Chris Kiptoo assured the country that the state is now focused on clearing the remaining debt.
This comes after the government a few days ago successfully raised $1.5 billion to repay a previous Eurobond that was to mature on June 24, 2024.
The Eurobond, which closed on February 16th, was priced at a yield of 10.375 percent with a 9.75 percent coupon.
“From our own domestic resources that we are going to collect from the Kenya Revenue Authority we expect that the Eurobond debt balance will be met and settle the 2 billion by June,” he said.
PS Kiptoo warned that Kenya will be in the spotlight if the administration fails to collect the much-needed funds to retire its Eurobond loan, adding that the majority of the revenue raised will be used to pay its debt.
“We take this very seriously and we must settle our debt. We honour our obligations because if we fail it will be really bad for our nation,” added Kiptoo.
He revealed that 60 percent of the money collected by KRA will be directed toward the settlement of debt, stating that the remaining balance will be used to meet recurrent expenditures, the county government’s allocations, and the development budget.
PS Kiptoo said the government has been left with no choice but to reduce its appetite for debt, which is becoming unsustainable.
According to him, the nation’s debt is rated as high-risk but sustainable.
