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Treasury denies Kenya defaulted on SGR loans

Treasury Cabinet Secretary Ukur Yatani. [Wilberforce Okwiri, Standard]

The National Treasury has denied that Kenya was recently fined Sh1.3 billion by China for allegedly defaulting on Standard Gauge Railway (SGR) loans.

In a Thursday statement signed by Treasury Cabinet Secretary (CS) Ukur Yatani, the government said it prioritises debt settlement upon collection of taxes.

“We wish to state categorically that Kenya has never defaulted on its settlement of its debt service obligations to any of its creditors, nor has any creditor filed or reported any claim of default on debt service payments on facilities extended to the Government of Kenya,” said the CS in the October 13 press statement.

Yatani said Kenya’s credit score is impressive, and that there shouldn’t be any cause for alarm.

“As a country accessing international financial markets to raise resources, Kenya undergoes frequent independent sovereign rating reviews whose outcomes are published widely. At no time has Kenya been flagged as a country defaulting on its external debt obligations,” Yatani said.

The CS said that all public debt, including the SGR loans, are from the Consolidated Fund in accordance with the Public Finance Management Act, 2012.

“We want to assure our creditors, development partners, investors and the general public that Kenya's financial position is sound and robust,” he said.

Earlier Thursday, reports were published that Kenya was fined Sh1.3 billion for defaulting on SGR loans, allegations the State has since denied.