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Treasury Cabinet Secretary Ukur Yatani has announced that Kenya cancelled the sale of a Sh115 billion Eurobond in 2022.⁣

The government has opted out of the bond whose primary underwriters had been picked as Citi Bank and JP Morgan.⁣

According to the Treasury, the rising exchange rates indicated that the debt would have been very costly for the country.⁣

“In our funding for this financial year, we factored in borrowing from the international market, the Eurobond. But we realised as a result of challenges in Russia and Ukraine the cost of borrowing has gone really high,” said CS Yatani.⁣

“Last year we borrowed at 6%, right now it stands over 12% and this is no longer feasible. That is why we are still exploring options to look at a number of banks that can advance us the money at a cheaper rate, a figure more or less than a figure of last year, an average of 6%,” he added.⁣

The government will instead turn to local borrowing and syndicated loans to help alleviate the cash crunch.⁣

Syndicated loans were last issued in 2019 by former Treasury CS Henry Rotich before the government shifted its borrowing policy away from commercial banks.⁣

This comes after the National Assembly approved a proposal to increase Kenya’s debt ceiling to Sh10 trillion.⁣

This will allow the next government to borrow Sh846 billion to plug the budget deficit in the fiscal year starting July 1.⁣

In October 2019, parliament increased the debt cap from Sh6 trillion to Sh9 trillion. As of September 2021, Kenya’s debt according to Parliamentary Budget Office stood at Sh7.99 trillion.⁣



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