Kenya's Ruto Pledges to Repay Part of 2 Billion Eurobond Early
17:15 09.11.2023 (Updated: 18:15 09.11.2023)
Kenya's public debt stood at 64.4% of gross domestic product in present value terms in June 2023, exceeding the 60% limit, according to the National Treasury.
Kenya's President William Ruto has pledged to pay part of the country's $2 billion eurobond ahead of schedule after negotiating with sponsors to help finance the redemption.
"I can now confirm [...] with confidence that we will and we shall pay the debt that has become a source of much concern to citizens and markets," the president said.
Ruto specified that the government will make a payment of $300 million next month on the debt, which is due to expire in June.
The president added that the move was made possible by the government's actions to find helping partners, both bilateral and financial organizations.
"We have worked hard at home and abroad to mobilize a broad coalition of bilateral development partners, multilateral banks and other agencies which have rallied to pull our country back from the brink of debt distress," Ruto remarked.
On Tuesday, David Ndii, the president's chief economic advisor, announced that the International Monetary Fund had agreed to significantly increase
financial support to Kenya to $650 million.
IMF backing for Kenya had already been increased by 45% to $3.5 billion in May when the Washington-based lender agreed to extend the 38-month program by 10 months to April 2025.
A month later, however, Ruto criticized the current credit system, calling it "unequal and punitive" because it fails in its mission to give everyone a fair chance, dividing countries into the rich and those that should "seek help."
While calling for reform of the IMF and the World Bank, Ruto also urged international creditors to rethink their debt management. He explained that Kenya pays $10 billion annually in debt service, adding that the amount could instead be used for the country's development.
In July, Ruto reiterated
his position, saying that the institutions of the Bretton Woods system (IMF, World Bank) are only slowing down the continent's development, while Africa needs a new financial institution that reflects its needs.