The International Monetary Fund (IMF) and the World Bank have forced Kenya to take a Sh75 billion coronavirus debt relief from wealthy nations as a precondition for accessing cheap loans.
Kenya is now planning to defer around $690 million (Sh75 billion) in debt payments as it seeks further funding from the Breton Woods institutions for budget support to weather the coronavirus economic hardships.
Treasury Cabinet Secretary Ukur Yatani reckons that Kenya made a U-turn in seeking a suspension of debt payments under a G20 initiative due to pressure from the Bretton Woods institutions.
A restrictive clause in the Eurobond terms stopped Kenya from seeking a suspension of debt payments because it could have forced the country to pay the entire Eurobond debt worth $6.1 billion (Sh652.7 billion).
Besides the Eurobond terms, the Treasury was fretful that the relief could hurt the country’s credit rating and be viewed as one that does not meet its international obligations.
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