Ruto Government Borrowed Ksh68 Billion in Three Months, Report Reveals
A report presented to the National Assembly has disclosed that President William Ruto’s government secured external loans amounting to Ksh68 billion between September and December last year.
The report, submitted to Parliament by the National Treasury on Thursday, February 13, indicates that most of these loans were obtained to cover budget deficits and fund infrastructure projects across the country.
Biggest Loan from Italy
Among the loans acquired in the final quarter of the year, the largest was a Ksh20 billion credit facility from Italy. The government secured this loan on October 14, and it is scheduled to be repaid in 27 instalments, with the final payment due in 2045.
According to the report, the primary objective of this loan is to support Kenya’s efforts in combating climate change and reducing greenhouse gas emissions.
Ksh8 Billion Loan from Germany
During the same period, the government also secured a Ksh8 billion loan from the German government, making it the second-largest loan taken in the last quarter of 2023.
This loan comes with an annual interest rate of 1.2 per cent and will be repaid in 27 equal instalments starting from November 15, 2029, until November 15, 2042. The funds are intended to help Kenya transition to a greener and more inclusive economy.
French Loan for Energy Infrastructure
On October 3, Kenya acquired its third-largest loan of Ksh4.8 billion from the French government. The repayment for this loan will be made in 30 equal instalments between July 15, 2030, and January 15, 2045.
This loan carries an annual interest rate of 0.883 per cent and was secured to finance the development of a robust and secure national system control centre. The project aims to enhance energy infrastructure while ensuring resilience against physical and cybersecurity threats.
Multiple Loans from China Development Bank
The China Development Bank also played a significant role in lending to Kenya during this period. The fourth-largest loan, worth Ksh4.5 billion, was acquired from the bank and is scheduled to be repaid in eight instalments between October 15, 2027, and April 15, 2031.
Additionally, the government took another loan of Ksh3.9 billion from the same bank, which will also be repaid in instalments from 2027 to 2031. This funding was allocated for road construction projects across the country.
Furthermore, Kenya received a third loan from the China Development Bank amounting to Ksh2.79 billion. This loan carries an annual interest rate of 4.0 per cent and was similarly earmarked for road infrastructure development.
Treasury’s Obligation to Report on Loans
As required by Section 31 of the Public Finance Management Act, the Treasury Cabinet Secretary must regularly present reports to Parliament detailing the country’s loan balances, new debts acquired, and repayments made.
This latest report sheds light on the increasing borrowing trend by the Ruto administration, raising concerns about the country’s growing debt burden and how the funds will be managed to ensure economic growth and sustainability.
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