Uhuru borrowed Sh105bn in four months – Treasury – The Star Kenya
• The last government borrowed six loans in four months.
• The loans were to finance various development projects.
Retired President Uhuru Kenyatta’s administration borrowed Sh105 billion in its last four months in office, a Treasury document indicates.
This translates to Sh26.25 billion borrowing each month from May 1 to August 31.
According to a document signed by then National Treasury Cabinet Secretary Ukur Yatani tabled in Parliament on Wednesday, the borrowings were from six loans that were procured to finance various multibillion-shilling development projects across the country.
The document showed that the loans were meant to also finance small and medium enterprises, budget financing, strengthening regional development, and cushioning the country against various challenges including Covid-19 and drought.
Four of the loans were from multilateral lenders, one from bilateral lender and one commercial lender.
Most of the loans will mature for servicing in 2025.
“The total value of the six loans signed is equivalent to Sh105,060,287,110. One of the loans has been partially disbursed by the time of submitting this report,” the document tabled by Majority leader Kimani Ichungwah indicated.
This brings government borrowings to Sh242.9 billion this year alone, factoring in the January 1 to August report that indicated the past administration obtained six other loans worth Sh137.93 billion.
The Public Finance Management Act, 2012 Section 13 (3) compels the Treasury Cabinet Secretary to report to Parliament every four months regarding loan balances brought forward, carried down, drawings and amortisations on new loans obtained from outside Kenya or denominated in foreign currency.
From the Treasury document, Sh36.2 billion procured from the Eastern and Southern African Trade Development Fund (TDB) as syndicated short-term multicurrency facility was to finance the government’s 2022-23 development budget but not limited to trade-related activities.
“The interest rate of the loan is a reference rate plus a margin per annum. The interest on over dues amounts will be increased by two per cent per annum above the applicable rate,” the report states.
To aid post-Covid-19 economic recovery, the government procured a Sh10.5 billion loan from the African Development Bank (AfDB). The loan payment period will commence in 2030.
“The programme aims at deepening the support to Kenya’s medium term development agenda by placing emphasis on fiscal performance, strengthening industrial development competitiveness as well as promoting economic and social inclusion by supporting the development of micro, small and medium term, social protection coverage and women’s empowerment.”
The last regime also sought Sh15.6 billion from the International Development Association (IDA) on June 29 to enhance pastoralists access to financial services for drought risk mitigation.
The Jubilee administration further secured Sh12.7 billion from IDA for East Africa Regional Statistics Programme to strengthen regional harmonisation, dissemination, and use of economic and social statistics for Kenya, Rwanda and Tanzania.
Another Sh26.4 billion was obtained from IDA for the National Agricultural Value Chain Development Project and will be used to increase market participation and value addition for targeted farmers in select
For MSME support, the last government borrowed Sh3.6 billion from Khalifa Fund for Enterprise Development United Arab Emirates (UAE).
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