The debt burden in Kenya continues to turn up the heat on Kenya’s economy even as it emerges that national treasury cannot repay Chinese debt.
In a report by the Business Daily, the national treasury has now been forced to resort to other measures to service the crippling loan including using a loan from the International Monetary Fund (IMF) to pay China.
Treasury’s director for management of public debt Haron Sirima in an interview with Business Daily said that it seeks approval to convert Special Drawing Rights (SDR) assets to fill a huge cash gap.
Treasury began repaying the Chinese loans in July 2021.
The move is likely to elicit heated reactions from Kenyans who are feeling the burden of a dwindling economy, coming just days after the fuel prices hit record high in latest review.
Recently, Kenya failed to get an extension for debt repayment with January for a period of six months to December.
China’s Exim Bank were left worried with Kenya’s request for debt suspension and forced Uhuru’s government to drop the request for a debt holiday.
The Treasury has now been forced back onto the drawing board and seeking loans from developed nations to repay the ballooning debt.
Kenyans should now brace themselves for tough conditions from IMF before accepting to service the debts running into trillions.
