Saturday, January 20, 2024 - A report by the Economist Intelligence Unit (EIU) has projected that the country will by all means necessary pay the Ksh322 billion (USD2 billion) Eurobond which is set to mature in June this year.
The Africa Outlook
2024 report released on January 18, explained that the government seeks to
protect the reputation of the country given the financial consequences attached
to defaults.
On the other hand,
it was projected that the repayment may cause a headache for President William
Ruto given the amount in question.
However, the EIU
forecasted that the repayment would be manageable despite predictions that the
economy may be affected after the repayment.
"Kenya’s biggest financial event in 2024 is the June 24 timeline to redeem a US 2 billion Eurobond in a single bullet payment, on top of other debt-servicing commitments.
"Using a combination of tactics, Kenya will strive to avoid a
default and the consequent damage to its reputation and will prioritise a
timely Eurobond redemption in 2024.
"The sum is
large enough to generate legitimate concern, but not so large as to be
unmanageable," read the report in part.
Ruto already
pledged that the country would repay Ksh500 billion towards the
Eurobond between December 2023 and January 2024.
Notably, he also
cautioned Kenyans to prepare for tougher times given the fiscal strategies that
will be implemented to help the country meet its debt obligations.
On the other hand,
the intelligence report noted that Kenya would ease its fiscal
demands should the Eurobond obligations be met.
"Provided
Kenya clears the barrier in 2024, external debt pressures will ease, as the
next Eurobond repayments (of US$1.9bn) are not due until 2027-28," the
report added.
Notably, Kenya is one of the countries which is projected to lead the continent in economic growth.
"This was credited to the anticipated rebound of the tourism sector and
the service industry.
The Kenyan DAILY POST
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