Kenya Plans $4.1 Billion in New Loans as It Lifts Debt Limit

NAIROBI (Capital Markets in Africa) – Kenya plans to borrow 422 billion shillings ($4.1 billion) from external lenders after lawmakers approved the government’s proposal to increase its debt limit.

The government of the East African nation is negotiating or about to sign 44 loan agreements with 15 lenders including the African Development Bank, China, Japan and the World Bank, parliament documents show.

The lawmakers last week approved the National Treasury’s proposed debt limit of 9 trillion shillings, under a plan to present the nation’s level of debt as an absolute figure and not as a percentage of gross domestic product. Kenya estimates the present value of its debt at about 60% of GDP this year, above the government’s 50% limit. The new ceiling effectively expands room to borrow by more than half of the nation’s debt that’s forecast to reach 6.4 trillion shillings next year from 5.81 trillion shillings in June.

The new ceiling provides “adequate borrowing space to allow the government to access concession funding sources to facilitate government investment,” according to the document posted on the parliament’s website. Several of the new loan-agreements are waiting to be signed, according to the document.

President Uhuru Kenyatta is looking to expand Kenya’s economy by increasing public investment in infrastructure, manufacturing, education, health and energy.

The table below shows some of the loans that Kenya is negotiating and waiting to approve as of Sept. 30., according to documents from the parliament.

Source: Bloomberg Business News