Kenya is searching for an extension of G20 Sh32bn debt depart

economy

Kenya is seeking an extension of G20 Sh32bn debt leave

Friday 29th January 2021

National Finance Building. FILE PHOTO | NMG

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BY OTIATO GUGUYU
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Summary

  • Kenya may receive additional debt relief from the Paris Club of International Creditors to help resolve financial issues related to Covid-19.
  • The country has already received a repayment break of Sh32.9 billion that it would have paid between January and June and will see more savings if the period is extended for another six months.
  • Central Bank of Kenya (CBK) governor Patrick Njoroge said an announcement to extend the debt service waiver could be made in April.

Kenya may receive additional debt relief from the Paris Club of International Creditors to help resolve financial issues related to Covid-19.

The country has already received a repayment break of Sh32.9 billion that it would have paid between January and June and will see more savings if the period is extended for another six months.

Central Bank of Kenya (CBK) governor Patrick Njoroge said an announcement to extend the debt service waiver could be made in April.

“We should add that the G20 has committed to looking into whether they could extend the debt service suspension initiative (DSSI_) beyond June 2021. They will look into this in April during the spring meetings between the IMF and the World Bank,” he said during a Policy Committee (MPC) post-money briefing yesterday.

The Paris Club – which includes Belgium, Canada, Denmark, France, Germany, Italy, Japan, the Republic of Korea, Spain and the US – earlier this month accepted a request from Kenya to suspend debt servicing from January to late June.

Kenya will repay the money over a period of five years with a grace period of 12 months, thereby reducing debt servicing, which triggered a crisis after a drop in sales due to a coronavirus pandemic.

The country has also requested an estimated Sh40.6 billion relief due from January 1 to June 30 from creditors outside the Paris Club.

Dr. Njoroge said Kenya’s bilateral debt to rich countries was $ 600 million (Sh66 billion) in the six months to June, with China holding more than half of the debt due at $ 378 million (Sh41 billion) .

Finance Cabinet Secretary Ukur Yatani said he had also received confirmation from China that Kenya would receive a similar moratorium.

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