Kenya seeks G20 $298m debt holiday extension

Kenya may obtain additional debt relief from the Paris Club of international creditors to help lessen Covid-19 related financial distresses.

According to The EastAfrican, the country has already procured Ksh32.9 billion (about $298.6 million) loan repayment break which it would have paid between January and June, and will make more savings if the period is lengthened for another six months.

Governor Patrick Njoroge of the Central Bank of Kenya (CBK) said an announcement extending the debt service waivers may come in April.

“We should add that G20 have committed to consider if they could extend the Debt Service Suspension Initiative (DSSI) beyond June 2021. They will consider it in April in the context of the IMF-World Bank spring meetings,” he said during a post monetary policy committee (MPC) briefing on Thursday.

Earlier this month, the Paris Club, which comprises Belgium, Canada, Denmark, France, Germany, Italy, Japan, the Republic of Korea, Spain and the US, said it had approved a proposal from Kenya for a suspension of debt service from January until the end of June.

With a 12-month grace period, Kenya will repay the money over five years, reducing the amount of debt service that has fostered a crisis since decreasing sales due to the coronavirus pandemic.

The nation has also applied for relief from non-Paris Club creditors valued at Ksh40.6 billion ($368.5 million) due from January 1 to June 30.

Dr. Njoroge said that for the six months until June, Kenya’s bilateral debt to rich countries stood at $600 million (Ksh66 billion), with China keeping more than half of the debt owed at $378 million (Ksh41 billion).

Finance Cabinet Secretary Ukur Yatani said that he had also received confirmation from China that a similar moratorium would be given to Kenya.

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