Kenya is anticipated to slow its debt repayments to China in the 2019 fiscal year for the first time since Beijing granted Nairobi a grace period.
In comparison to forecasts for the current fiscal year, which ends in June, the treasury has decreased the budget for servicing loans from China’s state-controlled lenders by 7.32 percent in 2023-24, to Sh112,39 billion.
According to Treasury data, the fulfillment of President William Ruto’s first full-year budget since taking office in September would be announced by Kenya having no financial obligations to the China Development Bank beginning in July.
The Sh99.65 billion set aside for the fiscal year ending in June 2022 will not cover the expected repayments for the current fiscal year.
The Exim Bank is responsible for the majority of the loans, particularly the $3.6 billion (Sh490 billion) substantial financing agreement for the 485km Mombasa-Nairobi SGR line.
The Treasury expects repayments to the Exim Bank to total Sh111.93 billion in the fiscal year beginning in July, up from Sh96.09 billion in the current fiscal year and Sh22.69 billion before the grace period ended.
According to budget documents, Chinese support will drop from Sh71.2 billion in 2017 and Sh29.5 billion in the current fiscal year to Sh1.74 billion for the fiscal year beginning in July.
This comes at a time when Dr. Ruto has stated that his government will reduce its reliance on costly foreign borrowing, particularly from China.
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